Are you pre-approved for a loan?

One of the biggest hurdles in applying for a mortgage is gathering all the paperwork. In general, please have these items readily available.  Lenders want detailed information on your financial past (at least the last 2 years) and present to help them to predict your financial future. Here's additional tips on smooth and successful closing.

A Pre-Approval letter gives you comfort in knowing how much home mortgage you can afford. We will carefully review your time horizon and financial feasibility with different home mortgage financing options to obtain optimum mortgage rates for you. A Pre-Approval letter is not binding on the lender. Upon receiving requested items above, we will submit your Home Mortgage Application for Conditional Approval. 

Secrets to Pre-Approval success factors (in order of hierarchy): 

1. Debt Ratio - The ratio of total debt to total income.
2. Credit Inquiries - We do not want to see new credit being opened.
3. Credit - A mid-score number that each of three credit bureaus calculates called FICO.
4. Capacity - Ability to pay by showing 2 most recent pay stubs or 2 years tax returns if self-employed. This factor is related to item # 1 above (Debt-Ratio).
5. Cash - Down payment verified by bank statements, retirement accounts or gift letter from relatives. Ideally - plan for at least 20% to avoid paying for Private Mortgage Insurance (PMI). However,  you can put down as little as between 3% - all of which can be gifted. PMI is not forever. Here are more information on how to remove Private Mortgage Insurance.