What Does It Mean to Be Pre-Approved for a Mortgage?

When pre-approved for a mortgage, a lender has looked over your finances and determined how much money you can borrow, how much you can pay per month, and what your interest rate will be. A pre-approved mortgage is not a guarantee that you’ll secure a loan for your potential home, but it can help you be a more competitive buyer.

Having a pre-approved mortgage leaves out some of the guesswork when searching for your dream home. It can help you set a clear price range and narrow down your choices. Sellers may be more willing to negotiate with you or may even expect a pre-approval letter during the sales process. A pre-approved mortgage also helps you stand out in a competitive market.

Make sure to gather all necessary documentation before meeting with your lender. To start the process, you'll need W-2 wage statement forms reporting your income from the past two years. You'll also need documentation to prove your:

• Identity
• Credit score
• Bank and asset statements (i.e., 401K, IRA, stock accounts)

It’s best to consult with a mortgage expert before you begin the home buying process. Make sure that your finances are in a solid spot before applying for a pre-approved mortgage—you've paid down your outstanding debts, your credit score is within a good range, and you've been steadily employed for at least two years. Keep in mind that mortgage pre-approval letters usually expire after 90 days, so make sure you’re serious about moving forward before you speak to a lender.

Robertson Homes has partnered with the area's best lenders who are dedicated to helping you navigate the mortgage pre-approval process. Call us at (248) 657-4968 or fill our form to get one step closer to finding your new home in the Detroit area.