Home buying or home shopping, as others refer to the process of finding a house to purchase is a very serious task. Aside from hunting the house which matches your preferences and lifestyle, there are plenty of things you should know such as getting a housing mortgage pre-approval. This is necessary because it is very impossible for an average wage earner to cash in for his dream house. Even those who are referred to as rich and famous sometimes avail of housing mortgages too. But there are also plenty of things you need to prepare to get approved. Discussed briefly are 5 of them.

Proof of Income: Gone were the days when home mortgage companies issue pre-approvals without submitting documentations or without the buyer going through a rigorous verification check. Today, a buyer needs to prove that he is capable of repaying whatever amount the lender is to give. Some of the documents considered as proof of income include W-2 statements, recent pay slips, tax returns, bonuses, and payments from clients if you have business.

Evidence of Assets: In support of your income-earning capacity, you also have to present evidences of asset ownership. The assets will serve as additional proof of loan-paying capability. Usually, the bank or the institution from where you will seek the pre-approval will require you to submit copies of your bank statements and investments. These documents will prove that you have adequate funds for the down payment, closing costs, and monthly dues. They are also your evidences of cash reserve.

Good Credit Rating: Most lenders require borrowers to have a score of 740 and above to avail of the lowest interest rates on home mortgage plans. But, those who have at least a FICO of 620 will get pre-approved. Those who have lower credit scores will have to negotiate. Lucky enough that there are mortgage companies that gives pre-approval to individuals with low credit scores. But usually, they are of higher interest rates. In case you have a low credit rating, it is better to fix it first by repaying outstanding credits to other companies such as from your utilities, internet, and credit card.

Verified Employment Documents: The proof of income usually does not satisfy credit and mortgage companies. Thus, you also need to prepare verified or certified employment documents. The employment document or certificate needs to contain your complete name, present address, name of the company, your position, and salary grade. The letterhead of the company where you are presently employed is also an important element of the employment certificate you have to obtain. Of course, it has to be duly signed by the company’s representative.

Other Documents: Any other documents which will be requested by the lender should be available upon request. Usually, these documents include copies of proof billing and identification cards. Be prepared to fill up any mortgage-related forms. You also have to prepare your Social Security Number as this will be used to pull out your credit report.

If you have prepared the above documents, you are at least eased out of additional burdens as may be brought by the housing mortgage pre-approval. Having these documents at hand will pave way towards a smooth-flowing house hunting and home buying processes.

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