The way to obtain pre-approval through a mortgage lender can seem a bit confusing if you’re a first-time homebuyer or not knowledgeable of the real estate industry. Let’s prepare you for a big step in the average buyer’s journey to homeownership by looking at how the pre-approval process works for homebuyers in New Jersey:
Check Your Credit
Before you apply for a mortgage or any other type of loan for that matter, you want to begin by receiving your free annual credit report from the major credit reporting agencies.
This report acts as a sort of financial background check on you, and you want to make sure everything on it is accurate in order to prevent any complications arising when purchasing your home.
Comb through the entire report from front to back and make note of anything that seems either unfamiliar or entirely incorrect. You then have an opportunity to contact the credit reporting agency to request changes. Alternatively, you could discover an outstanding debt you have forgotten and you can then remedy that issue appropriately.
Once you know your credit is accurate and cleared up, you’re certainly ready to move forward with the pre-approval process.
Browse Your Lender Options
Not all mortgage lenders are alike, and it’s up to you to find out which one is best for you.
When looking for your lender, you want to get details on potential interest rates, payment methods, and what types of mortgages they issue. The types of mortgages issued by a lender can vary from different loan terms (10-year, 20-year, 30-year) and programs such as VA or USDA loans.
If you are looking to acquire a VA or USDA loan, it’s highly suggested that you find your lender through your local branch of the Federal Housing Administration to avoid any possible predatory or fraudulent lenders.
Apply for the Loan
When you have found your lender of choice and a property in which you are interested, it’s time to get the ball rolling by going through that lender’s application process.
You will be required to include financial details on the home you are looking to buy and the lender is likely to want to know some basic information regarding your income.
It’s important that you fill the application out truthfully and accurately. Embellishing your income or the value of the property on which you’re looking to bid is only likely to land you in hot water later on.
After you have completed your application, it’s a matter of time before they will contact you and you can continue along the pre-approval process or get things going with a different lender.
Cooperate With Your Lender
With your application sent off to your lender, the next step is going to require you to give some documentation in order to prove your access to savings, regular income, employment, and possibly other aspects of your financial life.
At this point, it’s very important to quickly hand over any requested documentation to your lender and keep in touch regularly. They will contact you to keep you updated, but if you ever have any questions or concerns, let them know.
Receive Your Pre-Approval Letter
After your lender has determined you are in a financial state that they are likely willing to approve the loan you have requested, you will receive a pre-approval letter.
This letter carries quite a bit of weight with agents and sellers because it shows that not only are you committed to purchasing a given property but it shows that your lender has faith in you to manage to purchase it and act responsibly.
Use that pre-approval letter to your advantage and let it shine through your offer and negotiation.
Help Navigating the Pre-Approval Process in New Jersey
If you’re looking to purchase a home in New Jersey and have questions about the pre-approval process, contact us today at 855-966-DEALS!