Often requested by realtors, getting pre-approved for a home loan is a best practice to help you determine how much you can borrow before placing an offer on a new place to call home. You’ll learn more about how pre-approval works with Greater Nevada Mortgage, and other important info to guide you on your homebuying journey.
Mortgage Pre-Approval
Pre-Approval Process
The process to get pre-approved is simple when you choose to work with us:
Submit Application & Credit Report
We’ll need to pull your credit report and do a brief review of your income/assets included in your application.
Pre-Approval
Based on your credit report and initial info in the preliminary review, we will determine if you can be pre-approved. If yes, then we will generate a mortgage pre-approval letter that states your credit has been pre-approved for up to a specific purchase price.
Approval
For final approval, we’ll need to do a more in depth review of additional documents, such as bank statements, paystubs, gift letters and a list of monthly debts. We’ve created a mortgage documents checklist to help you gather most of what you’ll need to provide.
Mortgage Pre-Approval FAQs
Here’s a selection of questions we’re commonly asked about the pre-approval process. Don’t see your question listed? Give us a call at 775-888-6999 or 800-526-6999, or send your question directly to us and a lending expert will follow back up with you.
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What’s the difference between a pre-approval vs pre-qualification?
These terms can get a bit confusing since different organizations use pre-approval and pre-qualification in different ways, sometimes interchangeably, but there’s a big difference between the two. Industrywide, this is what pre-qualification and pre-approval generally mean.
Pre-qualification is an estimate based on limited data when buying a home. Thousands of people receive letters on a daily basis congratulating them on being pre-qualified for large sums of credit or money. However, most recipients would not be approved for those lofty numbers once banks start looking your current standing against their qualifications.
Pre-approval is a more rigorous process done by a lender’s underwriting department where the financial institution will pull your credit report and look at your bank statements, income, assets, and debt to determine how much money they will lend you to buy a home. This pre-approval document can then be presented to a realtor, so they know you can borrow the money to meet the asking price for that property.
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Why should I get pre-approved?
Pre-approval can be a helpful tool when looking to buy a house, giving you an advantage versus waiting to try and do it all after finding the house you want. Pre-approval helps with two things:
- It saves time. You don’t have to wait to be approved before your offer is accepted.
- It gives the seller certainty that you can afford to buy a home. Otherwise, the sale might fall through if you don’t get approved to borrow the money for the purchase.
After you sign the paperwork, the bank will still need to appraise the house to ensure the home is worth that price.
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How long does it take to get pre-approved by Greater Nevada Mortgage?
Upon receipt of all income and asset documents requested, pre-approval can typically be issued within a short period of time.
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What’s the best way to get approved for a mortgage?
Knowing your financial health is crucial to starting the approval process. Preparing your documents can ensure the approval process goes quickly and smoothly. Here’s how you should start:
Check your credit
Get your credit score and a free credit report at AnnualCreditReport.com. You’re entitled to a free credit report every 12 months from each of the three national credit bureaus (Experian, TransUnion, and Equifax). The better your credit score, the more you can potentially borrow and get better interest rates. You can dispute any errors on your credit report as well.
Calculate your debt-to-income ratio
Your debt-to-income ratio (DTI) is important to your financial health. Take your gross monthly income and compare it to any debt payments (like credit cards), student loans, car loans, homeowners association dues, property taxes, homeowners insurance, and other regular payments. Money you spent on food, utilities, transportation, or entertainment won’t be included, so you don’t have to tell us how much you spend on streaming services or show us your takeout bills.
Prepare your financial documents
Lenders will require documents to check your financial health, such as bank statements, pay stubs, W-2s, gift letters, and more. For a complete list of documents you’ll need to get approved, visit our mortgage documents checklist resource.
APR = Annual Percentage Rate. APR is the cost to borrow money expressed as a yearly percentage. For mortgage loans, excluding home equity lines of credit, it includes the interest rate plus other charges or fees.
Rates and terms are subject to change without notice. Rates are for illustrative purposes only, and assumes a borrower with a credit score of 700 or higher which may be higher or lower than your individual credit score. Adjustable Rate Mortgage (ARM) loans are subject to interest rate, APR, and payment increase after each change period. For instance, a 5/5 ARM means that you will pay a fixed rate for the first five years of the loan, and then your rate is subject to change once every five years thereafter through the remainder of the loan. Interest rates and APRs are based on current market rates, and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Depending on loan guidelines, mortgage insurance may be required. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit history up to the time of closing. The estimated total closing costs in these rate scenarios are not a substitute for a Loan Estimate, which includes an estimate of closing costs, which you will receive once you apply for a loan. Actual fees, costs and monthly payment on your specific loan transaction may vary, and may include city, county or other additional fees and costs. Not all loan options are available in every state. Borrower is responsible for any property taxes as a condition of the loan. Membership with Greater Nevada Credit Union is required for select loan options. This is not a credit decision or a commitment to lend.
Please contact a Mortgage Consultant to learn about all details on loan options and programs available. You may contact one directly, or call Greater Nevada Mortgage at 775-888-6999 or 800-526-6999. We do business in accordance with the Federal Fair Housing Law and the Equal Opportunity Act, and the California Fair Employment and Housing Act.
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