There are a couple of main reasons
You want to know exactly what you can qualify for.
There is no point in going out looking at houses if you really don’t know what your budget is and the last thing you want to do is go out and find the home of your dreams then submit an application to a lender and find out that you don’t qualify for that much so we want to find out what your budget is up front.
We want to know what the monthly payments are going to be.
For instance if you say I do not want to have a monthly payment higher than 1,500 a month we need to know what that equates to as far as a purchase price so that when you’re home shopping you are comfortable with what your monthly payments are going to be just because you’re approved for 700,000 dollars doesn’t mean you need to spend that much.
When you are submitting your offer to a seller you don’t look like a very serious buyer.
If you’re not already pre-approved, if we don’t know that you’re qualified to get that loan, then it looks like you haven’t really done your homework. You’re still at the beginning of your shopping home buying process, you’re just not a very serious buyer to that seller and if they’re getting multiple offers, you’re not qualified the house of dreams will be someone else’s home.
The process to get pre-approved is very simple … Don’t waste your time looking for a house without this important step, it will only take a few minutes of your time and it will save you many heartaches in the process.
This is what a mortgage lender will normally ask you for:
- Copy of driver license
- Social security information
- Previous 2 months bank statements
- (2) Most recent paystubs
- Tax Returns / W2 (recent 2 years)
- Basic information about you.
This may vary from lender to lender and depends of your situation, if a foreigner, buying under a corporation etc…