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Home Buying Basics: Getting Pre-approved for a Home Loan

Category: Finance

Home buying can be a heavy task for many people. This is especially true if the property they are eyeing has a hefty price tag. It takes time and effort. If you want to save on these factors, you need to make sure that pre-approval is one of your priorities.

Pre-approval simply means that the bank from whom you will borrow the funds has already looked into your financial health and has decided to lend you a specific amount.

Whether you are buying a home for sale in Aransas Pass or in New York, applying for a pre-approval is a different process altogether. To save time, you need to keep the following things in mind:

Collate all your documents

Assuming that you have already chosen a bank or a lender, it is time that you collected all the necessary documents for the application. These normally include proof of income and proof of asset. You will also be required to give your Social Security number.

Fix your credit rating

As you are applying for a loan, the bank or the lender needs to identify if you are trustworthy of the obligation. This is something that they determine through credit rating. If you have a poor rating, you should fix that first by paying your debts on time. Once your rating has improved, you can now apply for a pre-approval.

Understand the offer

The result of the application is usually released after 90 days. You will be offered a package or something, but before you go for it, you need to understand all the benefits and stipulations covered. Protect yourself by asking the right questions. This will help keep you from encountering problems down the road.

These are just some of the things to keep in mind when applying for a pre-approval. You can seek the advice of your friends or fellow family members who have already bought a home.