Buying a new home in a state like Texas can be harder than you think. Because it usually involves a large sum of money, most of us need to apply for a mortgage, which is a time-consuming and tedious process.
But here’s a catch…
Working with the best mortgage lender Dallas can help reduce much of that stress and ensure that the entire process goes smoother and faster.
According to real-estate experts and industry leaders, you must consider meeting with a lender even before you start searching for a home.
This is called prequalification.
Sounds scary, right?
But it doesn’t have to be that tough. All you need to do is to prepare yourself before a meeting, and you’re in place.
Here are a few tips to get you ready for that initial prequalification meet-up.
Bring the right documents
As a general rule, you should arrange every document that is somehow related to your finances. We know what you’re thinking.
You may have more than you need, but this is definitely better than not having the required documents.
One of the biggest reasons mortgage approvals delay is because the applicant fails to provide the needed documents in the required timeframe. You don’t want that.
You may also ask your lender to provide you with a clear idea of what you should or shouldn’t bring to the meeting. While every mortgage approval case is different (and you may be asked to bring particular documents), almost everyone will be asked to provide the following documents:
- The application form
First things first, you have to fill out an application form. You can find and fill this form online ahead of time. This will save you and your lender a lot of time. The application form also includes a list of requirements the bank may require as part of your application.
- Proof of your identity
To get pre-approved, you’ll also have to provide your lender with your proof of identity. This could be your driving license or ID card issued by your state. Besides that, you can also submit your Certificate of Naturalization or Citizenship as your proof of identity.
- Proof of your income
Homebuyers must also produce income proof before they attend a prequalification meeting. The authorities are not going to trust your words as they’ll need to see whether you can make monthly mortgage payments. You can either present your recent pay stubs or produce W2 Wage statements from the past two years.
Business owners, on the other hand, may have to present their yearly profit and loss statements and two years of records.
You may also need to declare your real-estate income (if any) to qualify for a mortgage. This includes rental income, lease, or the current market value of your rental property.
- Proof of your assets
In order to qualify for a mortgage loan, a buyer may also have to produce bank statements and investment account statements to prove they have ample funds to pay for downpayments and closing costs.
- Debt records
Lenders also consider your debt-to-income ratio to determine the amount of money they’ll loan you. For this, they’ll have to examine your current financial commitments to see whether you’re able to accommodate new debts into your monthly debt schedules.
List all monthly debt commitments, including auto loans, student loans, and more. If you don’t have any prior credit history, you can also present your utility bills or any other proof of regular payment as evidence.
- Other records
Besides these basic documents, your lender may also ask to bring:
- Downpayment gift letters
- Social security number and signature
- Bankruptcy and foreclosure
- Employment verification
Have a list of questions handy
Prequalification is a comprehensive process. You’ll be needed to share a lot of personal and financial information throughout the process. But, it is also essential to have your list of questions handy that you want to ask from the lender.
For your convenience, we have listed down a few important questions you should ask from your mortgage lender in Texas to have a clear idea of what they offer.
- What mortgage options do you offer?
- Which option do you think fits my needs, and why?
- Do you also offer any downpayment assistance programs?
- What is your interest rate and APR?
- What minimum downpayment do I have to make at the start?
- Whats will be the total cost?
- How long will it take to close?
Whatever questions you have in mind, make sure you have them in writing so that you don’t forget anything in the first meeting.
Have a clear budget in mind
Although you will be preapproved for a certain mortgage amount, that doesn’t mean that’s what exactly you should spend. That is why it is important to have a clear budget in mind before you head over to meet your lender in texas. Put down the total household budget that your lender can review and adjust with you.
It is also important to understand that your lender will be looking at your gross income instead of your take-home pay. So, don’t forget to list down all recurring expenses, including entertainment expenses and other lifestyle expenses like eating out and travel.
What to expect?
Good communication between you and your lender is essential. If you live in Texas, it is better to work with a local lender who can resolve every issue that pops up along the way.
How long does it take to complete the entire process?
Well, we’d say it depends. If you have everything handy and you’re working with an experienced lender, then you can expect an early approval.
If you’re unsure, call your lender and ask about the required documents. Remember, no question is irrelevant or stupid. Buying a new home and acquiring a mortgage is a big deal. So talk about e必利勁
We hope this post has cleared some of your doubts about prequalification and mortgage preapprovals. Have questions? Drop them down below, and we will get back to you at our earliest.