“Should I get pre-approved for a mortgage before looking at homes?” Getting pre-approved for a mortgage will give you a clear idea of the home that you can afford and a 60 to 90 day window to conduct your home search.
How Long Does Pre-Approval Take?
Getting pre-approved for a mortgage typically takes up to 48 hours depending on your lender and also the paperwork that you will be required to present to your lender like: two years of income tax returns, paycheck stubs, bank statements from your checking and savings accounts, documentation of your investments and also the name of your current landlord.
Before Getting Pre-Approved Do This
Yes, you want to get pre-approved for a mortgage but before you do that you should obtain copies of your credit reports at least three months in advance so you have plenty of time to verify what exactly is on your credit report and remove any inaccurate information that the credit bureaus may be currently reporting about you.
Debt to Income
Another important thing to do before getting pre-approved for a mortgage is to pay down as many outstanding debts as possible. For example: credit cards or charge cards from major stores because, your lender will want to make sure that your current debts do not exceed 28 percent of your monthly income because, they want to have the confidence that you will be able to pay your mortgage loan every month.
Should I Close Credit Accounts?
When paying down credit cards do not make the mistake of closing credit accounts because it can actually hurt your chances of getting a mortgage if you close accounts rather than paying them off and just keeping those account open until after escrow has closed on your new home.
You will also not want to apply for any credit accounts before you get pre-approved for a mortgage since each hard hit on your credit history will ding your credit score and actually limit your chances of a pre-approval.
For more information on steps to take before buying a home, or to view the latest Orange County Homes for Sale, contact Fred Sed & Associates today by calling us at (949) 272-0125.