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Pre-Approval

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October 30, 2013

Mortgage Pre-Approval in Illinois: A Must Have for Serious Home Buyers

Have you been looking at homes online? Are you and your spouse dreaming of an awesome condo you have found with a great view of Lake Michigan or a single family home in the suburbs that is close to great schools and clean spacious parks for your growing family? Do you fully understand your mortgage financing options and have you been fully pre-approved?

If the answer to the last question is no, then you are doing it all wrong. In this mortgage market, it is imperative to get pre-approved first, and then look for a home. For starters, you may not qualify for a mortgage under today’s more strict underwriting guidelines. There is nothing more frustrating than to find the home of your dreams and then have some mortgage lender tell you that you cannot obtain mortgage approval because of an unpaid parking ticket that is now a collection or because you have not been on your current job long enough.

And when you do get pre-approved, make sure it is a complete pre-approval. If a lender issues a pre-approval without asking for pay-stubs, W2s and tax returns, it is a worthless pre-approval. Read the fine print – the pre-approval has many loopholes which states it is not “a commitment to lend”, which is known as a Loan Commitment letter. You should treat a pre-approval the same way you would treat a loan application.

Have the following documents ready when you obtain your mortgage pre-approval:

  • Last two pay stubs
  • All W2 forms for the last two years
  • Federal tax returns for the last two years
  • Most recent monthly bank or investment statement for all accounts

You need to show sufficient funds for your down payment, closing costs and financial reserves that equal at least two months of mortgage payments; more if you are applying for a jumbo home loan. Also, be prepared to explain and document any deposits that are not usual payroll deposits.

By obtaining a complete pre-approval before you begin your home search, you will be better prepared, search for homes in the right price range and have more leverage when it comes time to negotiate. To obtain a free mortgage pre-approval, contact United Home Loans below or at 708-531-8388.

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