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Step 1 For Buyers: Preapproval Letter

Updated: Mar 7

Getting a loan preapproval letter from a reputable lender is an easy process that should be done before you begin your home search.

Why You Need This Letter

You and your agent need to know what price range you should be looking in.

When you look at houses in a higher price range than you can afford, you'll be setting yourself up for disappointment. It's hard for a $100,000 house, for example, to compete with a $150,000 house.

Most sellers and their agents require preapproval letters to be submitted with offers, so make sure your agent has a copy of this document.

That way, you'll be ready to go should you find a house you love and want to make an offer.

During the preapproval process, your lender will explain expenses you'll incur when purchasing a home.

Understanding associated expenses allows you to budget accordingly.

Applying For A Loan

Contact a lender (or lenders) of your choice and ask what you need to do to complete and sign a residential loan application and any required disclosures.

Some lenders allow you to fill out an application online, so don't hesitate to ask if this is something that would be helpful to you.

Set up a time to meet with your lender(s). It's not unusual for buyers to interview two or three lenders if they don't have a trusted advisor already in place.

Limited Time

If time is limited and you need to move quickly, bring the following items with you to your initial lender meeting:

  • Copy of driver's license or photo ID for each borrower.

  • Copy of three most recent pay stubs for each borrower. (If you're retired or disabled, provide a copy of "Statement of Benefits" letter.)

  • Copy of complete Federal Tax Returns for the past two years.

  • Copy of W-2s and/or 1099s for the past two years for each borrower.

  • Copy of checking and/or savings account statements for the past two months.

  • Copy of 401K and/or investment statements if funds are being used for down payment.

Now You Are Ready

Feel free to reference this post and use it as a checklist as you begin the preapproval process.

If you are not familiar with our H2H brokerage and our exceptional real estate services we offer Southern Illinois, please call one of our offices and ask to speak with an H2H broker.

Don't go it alone.  Call 997-HOME (4663)!


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