Why should you get pre-approved now before the spring market?
The spring season is historically one of the busiest times for buying property and getting a pre-approval in Maryland. As the weather gets warmer and the days get longer, the property market heats up, and so does the competition. Homebuyers must be strategic and proactive in preparing themselves for a successful purchase. One of the most essential steps in the homebuying process is securing a pre-qualification or pre-approval for a home loan. However, it is crucial to understand the difference between pre-approval and pre-qualification.
Getting pre-qualified is when a mortgage loan officer reviews the borrower’s income, debt, and financial status information. The loan officer may run a “soft credit inquiry” and then provide an estimate of the loan amount they may be eligible for.
Pre-approval, on the other hand, is a more thorough process. When borrowers apply for pre-approval, they must provide more detailed financial information. The items include proof of income and documentation of assets and liabilities. A soft credit pull is required. All this information is reviewed to determine the borrower’s creditworthiness, ability to re-pay, and the appropriate loan amount. A pre-approval is more valuable for the homebuyer.
However, Mortgage Equity Partners takes it further by offering a fully underwritten pre-approval program for Maryland residents! MEP’s underwritten pre-approval gets homebuyers one step closer to their dream home and gives them an advantage in any competitive market. Your loan officer can get you pre-approved for a loan even without a property address. If you submit a complete loan application with all the required documentation, you can receive a conditional loan commitment from an underwriter. It is stronger than a pre-qualification or a pre-approval. Realtors love MEP’s underwritten pre-approval program because they know you are conditionally approved and ready to move forward. Once you find the Maryland home you want to buy, most of the upfront work on your application is already complete, which is a bonus and saves time.
What documents does a homebuyer generally need for a complete mortgage application:
- Most recent pay stubs
- 2 years W2s
- Copy of driver’s License or other approved ID
- Most recent bank statements
- Explanation of any inquiries on your credit report (signed and dated)
- Purchase Contract
- Copy of earnest money check once under contract
- Insurance quote (once the loan is approved)
If applicable:
- Gift letter and receipt of funds
- Divorce decree and separation agreement
- Mortgage Statement
- Most Recent Tax Statement and insurance for all other properties owned
- Bankruptcy discharge and a complete list of debtors
If self-employed or commissioned:
- 2 years of tax returns with all schedules
- 2 years of business tax returns
- 2 years of 1099s or KIs and business license
*The documents needed for each transaction may differ slightly.
You should also know your credit score and verify that your credit report is accurate. Consumers can request a free credit report from reputable credit bureaus like Equifax, Experian, or Transunion up to twice a year. Reviewing your credit report will help identify any errors or discrepancies hindering your pre-approval and official loan approval.
Researching loan programs and the criteria used for approving loans is also essential. Your Mortgage Equity Partners loan officer can help determine which loan program is right for you.
Key Takeaways:
Pre-qualified and pre-approved both mean that your financial situation has been reviewed and you meet some of the requirements to be approved for a mortgage.
MEP’s fully underwritten pre-approval is a conditional approval for a loan.
The spring season can be exciting and challenging for homebuyers as competition for homes increases. MEP’s underwritten pre-approval can give you a significant advantage over other potential buyers, showing you are financially stable and serious about making an offer. Contact our loan team today to be ready for the spring market!
