If you are planning on purchasing a home this spring you will need a mortgage. Before you begin house hunting it is recommended that you get pre-approved for a loan so that you know how much you can afford. Remember, pre-approved and pre-qualified are not the same.

A pre-qualification is good to get a ballpark figure but if you’re serious about becoming a homeowner you will want a more accurate number in mind to set your budget. The main difference between pre-qualification and pre-approval comes down to credit verification. Your credit score is a big factor when it comes to qualifying for a mortgage loan and with a pre-approval your credit history will be reviewed.

With a pre-approval your lender will also be reviewing your income, assets, debts, etc. to determine the loan amount you will qualify for.  This means you will need to be prepared to provide the following documentation to your lender: W-2 (2 years) and 30 days of paystubs (If self-employed: last 2 years tax returns with schedules, YTD P&L balance sheet). 2 months of statements on all bank accounts including checking, savings, money market, retirement accounts, mutual funds, stocks, etc. Open loans and credit accounts-names, addresses, account numbers, monthly payments and balances.

Once your lender gets a look at financial situation by reviewing your documentation you will be presented with a pre-approval letter which can add to your negotiating power by showing prospective sellers that you have been pre-approved for mortgage financing.

Contact me today for your pre-approval and save time house hunting for only the places you can afford.