Why be Pre-approved For a Home Loan When Still Shopping For a House

Most people find the most enjoyable part of searching for their next home is looking at different neighborhoods and houses. Mt. Washington homes, for example, are very different from Echo Park properties. Highland Park streets don’t look at all like neighborhoods in Atwater Village. It’s still not easy, but it’s quite enjoyable.

  • However, the real work and the most important to your goal of purchasing a home in Northeast Los Angeles is getting the right financing. It is a good idea to get pre-qualified before you even consider making an offer.
  • Preapproval – You are looking for a home in Mt. If you are looking for a home in Mt. Your agent should be able to state that the buyer has been preapproved. If the seller is motivated (i.e. they don’t want to wait a few weeks before learning that the highest bidder can’t qualify for a loan), they might accept a lower offer from someone who seems more solid.
  • What are the doubters saying A pre-approval does not guarantee that you will be approved for a mortgage. It is less certain that you will receive a favorable rate or set of terms. Pre-approval is a process that requires minimal documentation to get you started and to let you know you are in the right place. It will identify a price range appropriate for your income level and possibly a credit check to detect “red flags”. The documentation requirements for homes have become more stringent over the past 10 years (post 2008 financial crisis), so it is necessary to provide tax returns from previous years and answer questions about income sources (e.g. “Where did this $30,000 come from?” “).
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How to do it: Long gone are the “no documentation” loans of 2008! It’s likely a good thing. Homebuyers want to be in a position to keep their home, enjoy it, and build value over the years. You will need the following documentation: Proof of income (W-2 statements and most recent pay stubs; proof of other income such as alimony or pay bonuses, royalties, or residuals); verification and employment (with a call to your employer and possibly a past employer); proof and assets (investment account statements and savings statements of any type, appraisals of property that you might own, and a letter stating that the assistance is a gift, not a loan).

Lenders are more likely to offer the highest interest rates to those with credit scores above 740. This applies whether you live in Hermon or Highland Park, as well as any other area in Northeast Los Angeles. However, if your credit score is below 740, that doesn’t mean you won’t be able to get a loan. This does not mean you will have to accept less favorable terms.

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Self-employed people have higher documentation requirements. Individuals who are considering moving out on their own should get a mortgage before purchasing a home.

A NELA Realtor who has experience in mortgage broker and home transaction can refer you to lenders and mortgage brokers. They will also show you any homes that might be of interest.