A pre-approval letter can certainly give you the leg up with competing offers, so it’s important to be ready when it comes to working with a lender. In short, your pre-approval is the lender saying you can afford a Beacon Hill condo after taking a quick glance at your financial statements. In order to obtain a pre-approval letter you need the following documents:
- Tax returns for the past two years.
- Pay stubs for at least three months if you have an employer or tax returns and profit and loss statements if you are self-employed. If you are changing jobs or relocating, a copy of your employment offer letter. Talk to your lender about any potential change in your employment prior to seeking pre-approval, as it may impact your ability to obtain a loan.
- Bank statements for the past three months.
- Other asset/income statements, such as 401k, retirement accounts, or real estate leases if you own investment property.
- If obtaining money from a third-party like a friend or family member, you will need a “gift letter,” which your lender can help you with.
- An idea of your credit score and monthly debts – student loans, car loans, etc. will be used to calculate your debt-to-income ratio, an important factor in mortgage lending.
- If you have a mortgage already, a couple of months of mortgage statements.
- If you are divorced, a copy of your divorce decree and documentation of any child support payments.
Obtaining all of these items together in advance will help you and your lender be prepared to provide you with a pre-approval letter. This can be a huge bonus and help you stand out in a multiple offer situation.
Bottom Line Boston Real Estate
Of course, getting pre-approved for a Beacon Hill home loan comes after you’ve selected a lender. The majority of lenders will have very similar rates; however, a local lender on the ground in the area you’re looking in will likely be more competitive and better-known amongst agents, which surprisingly can have an impact on the credibility and weight given to the pre-approval.
Sorry we are experiencing system issues. Please try again.