Getting pre-approved for a mortgage loan is one of the easiest ways to make the first-time homebuyer process simpler. Even if you're an experience buyer, pre-approval can speed up the mortgage process and get you in a home sooner. Essentially, you know exactly what you can afford and sellers know you have funding at your disposal. So what do you need to get pre-approved? This guide from New American Funding, a national mortgage banker, tells you the 5 things you'll need for a pre-approval. Happy shopping!

2. What is a Pre-Approved Mortgage Loan?
A pre-approved mortgage loan is obtained using much of the same information required for a standard mortgage loan application. By applying for and receiving pre-approval, savvy home shoppers know in advance exactly how much home they can potentially finance. Pre-approvals generally remain valid for up to 90 days and they are not a contract, so there’s no risk to the borrower. Benefits of Pre-Approval
•
Prevents home buyers from considering houses beyond what they can finance
•
Shows prospective sellers you’re serious, making purchase offers more credible
•
Many bank-owned homes require a pre-approval letter

3. What You Need – Credit Report
Credit reports are an important tool for lenders to understand your credit history, how timely you are with payments, your current debt load and past bankruptcies. To pull a copy of your credit report, a lender needs your full name and social security number. The better your credit score, the better the chances you will qualify for a lower interest rate. Tip: Improving Your Report
•
Check your credit report in advance and correct any errors
•
Pay down outstanding debts
•
Make sure all payments are current
•
Don’t apply for new credit or make major purchases going into the process

4. What You Need – Asset Information
Lenders need a solid understanding of your financial position in order to match you with the best loan opportunity. They will want to review three months of bank and investment account statements to ensure you have the necessary cash for down payment and closing costs. All necessary funds should be in your bank at least 60 days prior to applying for pre-approval.
Tip: Cash Gifts
If some or all of the funds for your down payment and closing costs were gifts from friends and/or family, those individuals should provide you “gift letters” indicating there is no responsibility to repay those amounts.

5. What You Need – Proof of Income
Lenders need to know how much money you earn in order to assess whether you can afford a mortgage payment, so proof of income is critical. For most people, this can be demonstrated using paystubs and W2 tax forms. Expect to provide at least one month’s worth of paystubs as well as W2s from each of the past two years. You should also report any additional income such as alimony or work bonuses.
Tip: Self-Employment Income
If you’re self-employed, most lenders require complete tax returns for each of the past two years. They may also ask to review additional company financial documents.

6. What You Need – Job Verification
Lenders need confidence that the amount you will likely earn through the life of the loan meets or exceeds the amount you currently earn. For that reason, they may look at your employment history to ensure you’ve been consistently employed over a period of years. Even someone who currently earns a high income may not qualify for pre-approval if his or her employment history is questionable. Tip: Recent Job Changes If you’ve been in your current job less than six months, a lender may also want to contact your previous company to verify your employment there.

7. What You Need – The Right Lender
Selecting the best mortgage lender for your home purchase is as important as finding the right home. After all, you’re entering into a partnership that may last several years. New American Funding matches home buyers with mortgage plans customized for their lifestyles and finances. Our friendly agents will work to get you pre-approved quickly with the best possible rates and terms. From a Satisfied Customer “My experience with New American Funding was fantastic. Everyone was so courteous, professional and responsive. It was an extremely smooth and quick process.”

8. Mortgage Loan Pre-Approval Checklist
Credit Report – The lender will pull this, but review a copy on your own in advance
Social Security Number – Necessary to pull the credit report
Account Statements – Three months of any bank or relevant asset accounts
Gift Letters – If money for down payment or closing costs was gifted to you
Paystubs – At least one month’s worth, preferably the most recent month
W2s – Your employee tax statements for each of the past two years
Proof of Additional Income – Alimony, recurring bonuses or other reliable income
Self-Employment Income – Complete tax returns for each of the past two years
Job Verification – Contact info for current employer and potentially prior employers
Securing a pre-approved mortgage loan is unique to each individual and lender. The list above provides a general outline of the documents necessary in most cases, but your situation may vary. Visit www.NewAmericanFunding.com today to get the ball rolling.

9. 5 Things You Need to Be Pre-Approved for a Mortgage Loan
To Find Out How We Can Help You Be Pre-Approved, Visit… www.NewAmericanFunding.com