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Mortgage Pre-Approval Process

Getting Started

Starting the mortgage pre-approval process is the first step to buying a new home. Potential buyers need three essential things—proof of assets and income, good credit, and employment verification to be pre-approved for a mortgage. Having pre-approval can help you receive more attention from potential sellers and allow you to bid more quickly and competitively when you find your dream home.

Pre-Qualification vs. Pre-Approval

Pre-qualification helps buyers get a sense of how much they can afford to spend on a home. Pre-approval is much more valuable because it means the lender has checked the buyer’s credit and verified all the documentation. The approved loan amount will be active for 90 days. Are you looking to get started on the mortgage pre-approval process? Here is what you’ll need…

  1. Proof of Income – This is usually from a W2 from the past two years, any recent pay stubs that show year-to-date income, proof of any additional income such as alimony or bonuses. You will also need two recent years of tax returns.
  2. Proof of Assets – This means that the borrower needs bank statements and investment account statements to prove they have the funds available as a down payment. You will also need money for the closing costs as well as some cash reserves. The down payment will differ based on the buyer’s FICO credit score, the type of loan, and debt-to-income ratio (DTI).
  3. Good Credit Score – Most mortgage lenders will require you to have a FICO Credit Score of 620 or higher to be approved for a conventional loan or even a Federal Housing Administrative (FHA) loan. When you work with the lender, they will let you know what things are affecting your ability to be pre-approved for a loan by pulling a soft credit check.
  4. Employment Verification – The lenders want to be sure that the borrowers have a stable employment. A lender will most likely call the employer to verify employment and salary. Anyone who is self-employed and wants to be approved for a mortgage will have to go through a more stringent process.

Work With One of our Local Lenders

National Bank of Coxsackie Bank of Greene County Homestead Funding Mid-Hudson Valley Federal Credit Union

First Time Home Buyer?

Are you a first-time home buyer? You may qualify for special loans and grants to finance your new home. Review our tips below to learn more about financing options available to you.

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Everything You Need to Know About Loans and Grants as a First-Time Home Buyer
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