Why Do I Need To Be Pre-Approved?

Why is Pre-Approval So Important?

In today’s fast-moving real estate market, being prepared is everything. Over half of the sellers in the Charlotte Metropolitan Region accept offers within just seven days of listing their property. What does this mean for you as a buyer? You need to be ready to act quickly when you find a home you love.

Sellers are much more likely to consider offers from buyers who have already secured loan pre-approval. In fact, some sellers won’t even entertain a pre-qualification letter and many won’t schedule a showing without seeing proof of pre-approval or funds. Going house hunting without that letter in hand could lead to missed opportunities and disappointment.

Imagine finding your dream home on the first day of your search but not being able to submit an offer because you didn’t take the necessary step of getting pre-approved. Don’t let this happen to you. Being pre-approved gives you an edge in competitive markets, shows sellers you’re serious, and can even speed up the closing process.

What to Bring to Your Lender Appointment

If you’re ready to get pre-approved, here’s a checklist of what to bring to your lender appointment to make the process smooth and efficient:

1. Proof of Identity:
   - Government-issued ID (driver's license, passport)
   - Social Security number

2. Proof of Income:
   - Recent pay stubs (usually two months' worth)
   - W-2 forms (for the last two years) or 1099
   - Last two year's tax returns (if self-employed or earning commission) / If corporation, last two year's 1120
   - Documentation of any additional income (e.g., bonuses, alimony, child support) If Self Empl

3. Employment Verification:
   - Contact information for your employer
   - Letter of employment (optional but can be helpful)

4. Proof of Assets:
   - Recent bank statements (checking, savings, retirement accounts)- 2 months from all accounts
   - Investment account statements
   - Proof of down payment funds

5. Credit History:
   - Some lenders may request authorization to pull your credit report during the pre-approval process. Be prepared to provide personal details for this check.

6. Debt Information:
   - Details of existing debts, such as car loans, credit cards, student loans, or other mortgages
   - Documentation of monthly payments and remaining balances

7. Additional Documents:
   - Rent payment history (if applicable)
   - Gift letters (if someone is gifting funds toward your down payment) - Mortgage and hazard insurance information if applicable

By gathering these documents ahead of time, you’ll streamline the pre-approval process and show sellers you mean business when you make an offer. Getting pre-approved is a crucial first step in today’s competitive housing market—don’t delay!

If you are seeking a lender or want information about whether you should go with your bank or a broker, contact LaRay today in order to review your options.