As soon as you start shopping for a new home, one of the most important steps you can take is to get pre-approved for your home loan. Getting pre-approved for a mortgage in Oakbrook Terrace, IL, can boost your buying power and give you peace of mind while you shop.
Why? When you get pre-approved for a mortgage, the lender has already approved a maximum amount for your home loan. You won’t have to worry about whether or not you’ll get approved for a different amount, and you’ll have real buying power when you make an offer.
Follow these tips and learn how to get pre-approved for a mortgage fast. Once the mortgage pre-approval process is underway, you can hit those open houses in Oakbrook Terrace with confidence.
Getting Pre-qualified vs. Pre-approved for a Mortgage
First things first, getting pre-qualified and getting pre-approved for a mortgage aren’t the same thing, and knowing the difference can give you an edge.
Pre-qualification seems like a simple process because it requires less documentation.
To get pre-qualified, a lender will ask you for some basic information, including your credit score, current income, and employment status. A pre-qualification is helpful as an estimate for what you can afford, but it doesn’t guarantee that you’ll qualify for a home loan for that amount.
Pre-approval is a more thorough process, but the payoff for potential buyers is significant.
When you get pre-approved for a mortgage, the lender does the extra work to verify your credit and income, along with the required documentation for a home loan in Oakbrook Terrace, IL. Your mortgage advisor will discuss different loan options, current mortgage rates, and your budget.
Once your mortgage is pre-approved, you’ll have a mortgage pre-approval letter that you can present with every offer. You’ll know the maximum amount you can borrow, and the sellers will know that you’re a serious buyer who can close fast.
A mortgage lender won’t finalize the loan terms until you’ve made an offer that the seller accepts. Once the new property is in escrow, the lender will complete the terms of your home loan and get the paperwork ready for closing.
Top 5 Questions on Getting Pre-approved for a Mortgage (Answered)
1. Do I need to get pre-approved for a mortgage before I make an offer in Oakbrook Terrace?
The short answer is no. There is no requirement to be pre-approved for a mortgage before you make an offer.
However, getting pre-approved for a mortgage is one of the best moves you can make if you want to make a competitive offer that stands out. In today’s housing market, your offer will be stronger if you have fewer contingencies.
For example, let’s say you make an offer on a property, and there are five other offers. In this scenario, the sellers have a lot of options. There are exceptions to every situation, but most sellers (and realtors) will want buyers who can close fast with the fewest contingencies.
A mortgage pre-approval letter shows that you’re a serious buyer who is ready to close fast. It also assures the seller that you’ve been approved for a home loan that meets or exceeds the offer.
2. What documents will I need to get pre-approved?
Getting pre-approved for a mortgage in Oakbrook Terrace, IL is similar to starting an application for a home loan, with a few exceptions. Mortgage lenders require varying documentation depending on the type of home loan you want, but it’s a good idea to start gathering the basic financial information early.
- Identification such as a passport or driver’s license
- Employment verification
- Proof of income (e.g., pay stubs, W-2 statements, bonuses, alimony)
- Tax returns for the past two years
- Recent bank statements
- Investment account statements
If you’re self-employed or plan to qualify using non-standard income, a mortgage advisor from the Claudio Prunotto Team can guide you through the process.
3. Does getting pre-approved for a mortgage affect my credit score?
Probably not. In most cases, getting pre-approved for a mortgage won’t affect your credit score. During the process, your lender will pull your credit report to process your mortgage pre-approval. A single request typically won’t impact your credit.
However, some buyers decide to apply with multiple lenders to compare mortgage rates in Oakbrook Terrace. This strategy can negatively impact your credit score since multiple lenders will trigger numerous credit inquiries.
Working with an experienced mortgage advisor in Oakbrook Terrace can help protect your credit rating. A qualified mortgage advisor can pull your credit score just once and shop for the best rates and loan options from various lenders–without affecting your credit score.
4. How long will it take to get a mortgage pre-approval letter?
Typically, a qualified borrower in Oakbrook Terrace can get a mortgage pre-approval letter in just a few days. Depending on your situation, it might take a bit longer, which is why it’s wise to start early.
Connect with a local mortgage advisor so you can make sure all your documentation is in order. If you have good credit and verifiable income, getting pre-approved for a mortgage is a quick process.
If you have a financial situation that is less common, getting pre-approved for a mortgage in Oakbrook Terrace is even more important, so you aren’t faced with holdups when you’re ready to make an offer. A qualified mortgage advisor can keep things moving quickly.
5. What happens if my home loan doesn’t get approved?
Once you’ve made an offer on a new home, it can be stressful waiting to find out if your home loan is approved. Even worse, rushing to get your application pushed through only to get denied.
This is one reason it’s smart to get pre-approved for a mortgage before you find your perfect home in Oakbrook Terrace, IL. Getting pre-approved for a mortgage gives you confidence and stability.
By getting pre-approved early, your mortgage advisor can put together customized loan options that fit your financial situation. Even if your credit isn’t perfect, there are several loan options that could be a good fit. Especially if you’re a first-time homebuyer, which we blogged about here.
How to Get a Fast Mortgage Pre-approval in Oakbrook Terrace
Step 1: Estimate how much you can afford
Use a mortgage calculator to find out how much you can afford. The results will only be a ballpark figure, but it can help set expectations. Decide on your price range, then connect with a mortgage advisor to discuss your homeownership goals.
Step 2: Connect with a Mortgage Advisor
Connect with a local mortgage advisor in Oakbrook Terrace as soon as you’re thinking about getting a home loan. A qualified mortgage expert can start the mortgage pre-approval process right away while you shop for your next home.
Step 3: Download your free credit report
You can download a free credit report once every 12 months. It’s a good idea to find out your credit score and check the report to see if any errors need attention. Your credit score will have a direct impact on the terms of your loan and your mortgage rate. By getting a free copy of your credit report early, you can resolve any errors ahead of time.
Step 4: Gather required documentation
Most mortgage lenders require similar documentation, with a few exceptions. Start gathering required paperwork to verify income and assets, employment information, bank statements, and tax returns. If you’re self-employed or plan to use non-standard income to qualify, connect with a mortgage advisor in Oakbrook Terrace to discuss additional information that will be required.
Ask your mortgage advisor for a quick list to help keep things on track. An experienced mortgage advisor will provide a checklist to follow and will make sure the process runs smoothly.
Getting pre-approved for a mortgage in Oakbrook Terrace means that your mortgage lender has already approved the total loan amount for your home loan. Getting pre-approved will help you stand out among other potential buyers and also lets sellers know you’re serious and you’ll be able to close fast.
Shopping with a mortgage pre-approval letter will give you peace of mind and a competitive edge when you decide to make an offer. Start the process early so your lender has all the required documentation and your mortgage advisor can keep things running on time.
If you’re thinking about buying a home in Oakbrook Terrace, IL, getting pre-approved for a mortgage will give you several advantages in today’s housing market. Start gathering your documentation and connect with a mortgage advisor from the Claudio Prunotto Team to discuss your homeownership goals. Getting pre-approved is a straightforward process with big payoffs. We’d love to help.