The Preapproval Process – What Your Bank Will Need From You
Buying a Home at the Lake of the Ozarks can be a pretty competitive process these days. The lake is known and loved across the nation now, and everybody wants to live that lake lifestyle. Now more than ever, getting preapproval for your mortgage is a must before you ever start looking at houses. First, you will want to know how big a mortgage you qualify for, and second, sellers will want to know you have the means to buy the property before they will take your offer seriously. But don’t worry, it’s not that complicated. You just need a few pieces of information for your lender to start the process. If you would like to learn more about what it takes to get preapproval, Your Favorite Real Estate Team can help. Just keep reading this blog!
Credit History & Score
Your credit history will tell the bank a lot about your
financial responsibility. What they see in your credit report will help them
determine how much they are willing to loan you, and at what interest rate. The
better your credit score, the more you will be able to borrow, and the better
your interest rate will be. On a long-term mortgage, your interest rate can
make a huge difference in your final payout for your house. So if your credit
score is not good, you should consider spending a few months and improving it,
before you get your preapproval or apply for a loan. It will be well worth the
savings in the long run! Overall what banks are looking for is that you don’t
have a habit of borrowing too much and that you consistently pay your bills on
time.
Proof of Income
Proof of income is important, of course, because your lender wants to know you have enough income to make your mortgage payment. The bank will want to see consistent employment history and consistent income that does not fluctuate seasonally. So you should be prepared to bring in one or two years of tax returns, as well as your paystubs, W-2s, etc. IF you are self-employed, the lender may ask for more specific documentation to get a full understanding of your financial stability. It is also important to have an understanding of your debt to income ratio. If you use no more than a third of your income towards debt, you have a much higher chance of getting a mortgage with great terms.
Proof of Assets
Your banker knows that buying a home costs more than just
the mortgage payment. There are numerous additional expenses associated with a
real estate closing, in addition to the down payment for the loan. It is also
important that you and the bank know that if you have any difficulties, you are
still able to make your payment. That is why they will ask about your assets and
ask for proof and documentation. You will want to be prepared to share your
account information regarding savings accounts retirement accounts and other
assets to demonstrate your financial security.
We hope this information on getting preapproval for your
mortgage was helpful. We know how devastating it can be when you have your
heart set on a house, and it sells before you have a chance to make an offer.
At Your Favorite Real Estate Team, we want to make your home buying experience a
pleasant and successful one. If you have any other questions about real estate at the Lake of the Ozarks, please give us a call. When you decide it is time
for you to own a home at the Lake of the Ozarks, we are ready to guide you
through the process and help you find the home of your dreams! For more
information about life at the lake and the local real estate market, be
sure to follow us on social media using the links below.
CONTACT ED SCHMIDT FOR ALL YOUR LAKE OF THE OZARK REAL ESTATE NEEDS
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