The real truth about mortgage loans and how the process works.
Obtaining a pre-qualification for a home mortgage loan should be your first step in the home buying process. Knowing an estimate of how much you can afford puts you in a great position with the Home Seller and the Real Estate Agent you are working with. A seller will know that you are serious and are able to move forward. It also shows the agent that you are motivated and took the first step to home ownership. Almost all home sellers will require a pre-qualification letter from your lender before they will even look at your offer. Many Realtors will also require the buyer to have a loan qualification before they will show properties to their client. The truth is that sellers and real estate agents do not want to take a chance with a buyer that is not motivated and did not take the steps to get qualified for a mortgage loan.
Being pre-qualified also puts your mind at ease knowing that if you find your dream home, you are able to act quickly and are able to place an offer before someone else does. Imagine finding your dream home only to find out shortly after that you are not able to secure financing for that home. It can be a serious disappointment. Being pre-qualified virtually eliminates that possibility.
Getting pre-qualified for a home mortgage is not a difficult process although it could appear complicated. Also being pre-qualified is simply an estimate of what you can afford and is not considered a full loan commitment between you and the lender. You will need decent credit and a stable job but there are many loan programs which will overlook some issues on a credit report. We have lenders that offer special loans if you do not have great credit or a large down payment.
The initial process involves a lender asking for your monthly income, how many years you have been employed, your savings and your monthly bills. The lender will then run your credit. Once the lender completes that process they will give you what is known as a loan pre-qualification letter. Although there is more work to be done with your lender in order to receive a full loan commitment, this will show everyone involved with the process that you took the time to speak with a lender and are serious about home ownership. It will also allow you to make a offer for a home.
The next step should be completed immediately after you receive your pre-qualification letter. In order for the lender to fully approve your loan and issue a full loan commitment they will need to verify your assets, income and other information that you provided to them initially. The lender will ask for 2 years of tax returns, a few months of pay-stubs and bank statements. All of this should match up with what you initially told the lender during the pre-qualification process. If there were mistakes made and your income is actually less than stated or you do not have the savings you first quoted to the lender, your loan could be denied. It is very important that you are completely truthful with your lender because anything you state will be verified by them.
We have many resources for great lenders in Las Vegas and Henderson. If you would like a list of lenders that have a proven track record, please don’t hesitate to ask. The lender you choose is one of the most important things you can do. Frankly, choosing the wrong lender can delay the process or even put your dream home in jeopardy. You want a lender that meets their deadlines and promises. Any delay could be cause for the seller to cancel the agreement and the deposit you placed on the home could be at risk. At the same time, you as the buyer must provide all documentation to the lender quickly so they can fully process the loan. It is a process that takes cooperation from everyone involved.