Get Pre-Approved for a Loan (step 2)
Pre-approval is the formal process of getting a loan. The lender will expect a check from you for the application fee. The fee will be used to order a credit report, and is a show of good faith on your part that you are serious about purchasing a home. Be prepared to show payroll check stubs, w-2s, bank statements and prior tax returns to the lender to ensure a quick loan approval. The sooner the lender has all the required information from you, the sooner you will know if you have been approved for a loan.
The lender will be able to give you more specific information about the interest rate you can expect and provide you with a truth-in-lending statement that will outline the cost of the loan and give you a more realistic idea of how much money it will take to close on your home purchase. You will also be given a pre-approval letter from the lender that shows the real estate agents and home sellers that you are a viable home buyer and qualified to purchase a home. Home buyers that provide a pre-approval letter along with the purchase contract are taken more seriously than those that cannot prove they are qualified buyers. In many cases, especially foreclosures, pre-approval letters are required before a purchase contract will be submitted to the seller.
View step 3 of the home buying process: Choosing a Real Estate Agent