The Preapproval and Application Process
Knowing your budget is important and we recommend getting preapproved before starting your home search. It will narrow down your criteria and help you feel confident making offers. We work with you to determine:
- Your maximum qualification amount
- The loan amount that fits your target monthly payment amount
- The loan products that best support your long-term financial goals
- An estimate of closing costs and total out-of-pocket to expect at closing
Having a strong preapproval letter also reassures sellers that the loan and closing process will be smooth, providing an advantage in the current, competitive market.
1. Gather Documents
- Paystubs: Most recent full month
- W2s: 2015, 2016
- For bonuses or hourly employees: Year-end paystubs that show bonus history or trend of number of hours worked (2015, 2016)
- Business tax returns: 2015 and 2016 or 2014, 2015, and proof of 2016 extensions
- K1s for 2014, 2015, 2016
- YTD P&L and balance sheet
From all borrowers:
- Individual tax returns: 2015, 2016
- Bank accounts, investment accounts, 401k, IRAs, etc, statements - Most recent two months, ALL pages including blank pages. Transaction histories cannot be substitued for statements.
- All large deposits require documentation. Visit Documenting Assets for details.
- Driver's license (both sides), green card, permanent resident card, visa paperwork, if applicable
- If you own property: Most recent mortgage and HOA statement, insurance declaration page for each property
- For jumbo loans (over $636K), be prepared to document 24 months of on-time housing payments. These aren't needed for preapproval but know that for rent, 24 months of cancelled rent checks will be needed, for mortgage, this will reflect on the credit report we pull
2. Upload/ Send Documents
- You can email us your documents, drop them off, or we'll provide a secure link to upload them
3. We'll review all documents and run a credit report
- A typical preapproval runs 3-5 business days. If you have a tight timeline, we can definitely expedite this.
- We typically run credit to pull both FICO scores and debts associated with each borrower.
- Note - when credit bureaus register a pull by a mortgage-related company, they can sell this alert to other finance companies. To opt out, call (888) 567-8688 or visit www.optoutprescreen.com.
4. We'll provide monthly payment and closing cost estimates
- These will help you understand options at different purchase prices
5. Preapproval letter
- Once you start making offers, we'll provide custom letters for each offer. Let us know a few days in advance of the offer date and we'll do a quick refresh of your file and prepare a customized letter.
Tips While Looking for a Home
- No large deposits that can't be paper-trailed
- Avoid taking days off if paid hourly
- Let's talk before any type of employment change
- Don't liquidate assets
- Make all debt payments on-time
- Let's talk before applying for any new credit (charge cards, credit cards, cars, etc) and before co-signing with anyone for anything