Buying a house might be one of the biggest events in your life, and it can be a confusing process if you have never done it before. One of the first steps you will need to take to buy a house is getting preapproved for a loan. Without a mortgage loan, you probably will never be able to achieve this goal. Getting preapproved is a process you should do before you begin looking at homes, and here are a couple important things to know about this process.
What it involves
You must begin the preapproval process by contacting the lender you would like to use for your loan. This process will require filling out a loan application and submitting a lot of different types of financial documents, such as your W-2 statements, income taxes, and paystubs. The lender might also require other types of documents, and the lender will check your credit. With this information, the lender will determine if you qualify for a mortgage loan. If so, the lender will preapprove you for a mortgage. If you do not qualify, you could check with other lenders, or you could wait until a later point in time and reapply.
What preapproval means
Getting preapproved does not necessarily mean you are 100% guaranteed a loan from the lender, but it does give you a good idea whether you will be able to get a loan. There are several important reasons why you should get preapproved before shopping for a loan:
- It prevents you from wasting time shopping if you cannot get a loan – A big reason to get preapproved is to make sure you can get a loan. If you shop for a home and try to buy the one you love, it can be devastating for you and the seller to find out you do not qualify for a mortgage loan.
- To help you know how much you can spend – Your preapproval will tell you the maximum amount the loan can be for, and this will help you know what your budget is when shopping for a home.
- It saves time later on – Once you do find a house to buy, the lender will have everything they need to get your loan approved instead of preapproved, and this will help speed up the process of buying the house you have selected.
If you want to start looking at homes for sale in your area, you should begin by talking to a lender about the preapproval process. To start this process, contact a mortgage lender today.
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