If you’re ready to buy a house, a mortgage pre-approval is the key to success. Without a pre-approval most buyers will pass you over for someone that is approved. Here’s what you should know about the real estate landscape today and how to get your mortgage approval.
The Competitive Real Estate Market
The real estate market is still saturated with buyers but not enough sellers. This means prices are still high and sellers are getting what they want for a house.
It also means sellers can be picky about which offer they accept. Most sellers have multiple offers to choose from and they stick with the buyers who have already been approved for a mortgage.
What Sellers Want from Buyers
Today’s sellers want buyers with mortgage pre-approval and who aren’t asking for a large number of contingencies. They want sellers that will accept what the seller wants including the same closing date, accept the items the seller plans to leave in the home and nothing more, and not ask for too many ways out of the contract, such as inspection contingencies, home sale contingencies, and appraisal contingencies.
Of course, sellers also want top dollar for their home, and today they can get it!
How to Get Pre-approved
To make sure a seller accepts your offer, you must get pre-approved for a mortgage. The process is simple and can be done in a matter of hours. To get pre-approved, follow these steps.
Apply for a Mortgage
Complete a mortgage application with a lender. On the application, you’ll provide information about your income, assets, and liabilities, along with your personal information including your address and employment history.
Provide your Documentation
Lenders need these documents to pre-approve you for a mortgage:
- Paystubs covering the last 30 days
- W-2s for the last 2 years
- Tax returns for the last 2 years if you work for yourself
- Employment information
- Last 2 months of bank statements
Get your Pre-Approval Letter
If the underwriter pre-approves you, they’ll issue a letter stating the loan amount, estimated interest rate, terms, and outstanding conditions to finalize your loan. When you make an offer on a home, you’ll show your pre-approval letter to increase your chances of the seller accepting your offer.
How to Stand out from Other Buyers
Because you’ll be competing against other buyers, here’s how to stand out from other offers:
- Have a current pre-approval letter
- Know what the seller wants and try to meet it (terms of the sale)
- Be courteous
- Write the seller a letter about why you want the home
- Be willing to negotiate
Getting pre-approved for a mortgage in 2022 is easy but getting a seller to accept your offer may be a little harder. Take the steps above and make sure you stand out from the other offers your seller receives.
Getting pre-approved is the first and most important step because it shows sellers you are an interested and capable buyer. Let sellers also see that you care about them and what they want, and you’ll have your way into your dream home.