A GSHL Pre-Approval Letter Can Be The First Step to Home Ownership.

The mortgage application process can seem intimidating, but it doesn’t have to be! Consulting with the Garden State team and receiving a pre-approval for a mortgage loan is the first big step towards becoming a homeowner.

A mortgage pre-approval is a letter from a lender indicating the amount of loan you can qualify for. Mortgage pre-approvals help create a loan package that is best suited to you and your needs. After receiving a pre-approval letter (PAL), you’ll have a better sense of what loan options are available to you, allowing you to prepare your finances for the big purchase. Your PAL will detail purchase pricing and interest rates, useful information when assessing your budget. This will make the home purchasing process far less stressful for you – as it should be! Having a mortgage pre-approval signals to real-estate agents and home sellers that you are both a reliable and a serious buyer.

FAQ's

How long is a pre-approval letter good for?

Pre-approval letters are typically valid for anywhere between 45 and 60 days. However, sometimes they can be good for up to 90 days. When you obtain a pre-approval letter, there will be a date on the top telling you when it expires.

Why do pre-approval letters expire?

A pre-approval letter expires because a bank needs to be up-to-date with your financial information. This includes your salary, assets, and debts. Three months is long enough for you to have left a job, taken on new debts, or spend what was in your account.

Keep in mind that even if you are pre-approved, it is likely that lenders will still want an updated set of pay stubs and bank statements around the time of closing.

What do I do if my pre-approval expires?

If your initial commitment period has expired and you still haven’t found the right home, you’ll need to get an updated pre-approval letter from your lender. If you go to the same lender, it can be as simple as re-verifying your financial documents. Bring to your lender any updated pay stubs and bank statements. If nothing major has happened to your finances, you should be able to get a new pre-approval letter from your lender.

Will getting preapproved by multiple lenders hurt my credit score?

A lender’s request to review your credit report counts as a “hard inquiry.” Hard inquiries can lower your credit score if they’re a result of trying to open a bunch of new credit lines in a short time. But multiple hard inquiries as a result of rate shopping for a home loan generally don’t hurt your credit score.

FICO, one of the largest credit scoring companies, recommends confining rate shopping to a relatively narrow period, such as 30 days.

What is the difference between pre-qualification and preapproval?

A mortgage pre-qualification is based on your estimated credit score and other details you provide the lender, such as the purchase price of a home you would like to buy, your down payment, your monthly debts and how you would want to structure your loan (length, fixed- or adjustable-rate interest, and so on).

With a preapproval, you complete a full application with supporting documentation, The lender pulls your credit report and score and puts an offer in writing to give you a loan at a given interest rate.

What is required to get pre-approved?

To get pre-approved for a mortgage, you’ll need five things—proof of assets and income, good credit, employment verification, driver’s license (or state issued ID), and social security number to pull your credit. If you plan on having a co-borrower, they must also provide all of the above.