The Importance of Mortgage Pre-approval

Buying a home can be both exciting and stressful. Something that could help reduce the anxiety is an ice-cold Pina Colada or a mortgage pre-approval, maybe even both, but we do not recommend combining them. A pre-approval helps clarify your financial standing and strengthens your position in a competitive real estate market. Securing a pre-approval should be at the top of your home-buying checklist. First, let’s clarify the difference between Pre-approval vs. Pre-qualification.

Pre-approval vs. Pre-qualification

• Pre-approval: Involves a comprehensive review of your financial documents, including tax returns and W-2s. The lender verifies your information and commits to a specific loan amount, subject to certain conditions. Pre-approval carries more weight, demonstrating to sellers that you’re a serious and qualified buyer.
• Pre-Qualification: A basic finance assessment where a lender evaluates your income, debts, and credit history to provide an estimated loan amount. It’s a quick process based on self-reported information.

Benefits of Getting Pre-approved

• Clarify Your Budget: Pre-approval provides a clear understanding of how much you can afford, helping you focus on homes within your price range. This prevents the disappointment of falling in love with a property beyond your financial reach.
• Gain a Competitive Edge: In a market where multiple offers are common, pre-approval signals to sellers that you’re ready to proceed, making your offer more compelling.
• Accelerate the Closing Process: Since pre-approval involves completing much of the mortgage paperwork upfront, it can expedite the closing process. Sellers often favor buyers who can close swiftly.
• Strengthen Your Offer: A pre-approved buyer is less risk to sellers, potentially giving you leverage in negotiations.
• Identify and Resolve Potential Issues Early: During pre-approval, lenders may uncover credit or financial issues you weren’t aware of. Addressing these problems early ensures they don’t derail your home purchase plans.

Taking the Next Step

These are some of the most requested documents when obtaining a mortgage pre-approval.

A copy of your ID
Two most recent pay stubs
Two most recent complete bank statements
Two most recent and complete Tax returns
Two most recent W-2s*
*self-employed borrowers may need to provide more documentation.

Below you will find some mortgage lending institutions.

Oriental Bank
Banco Popular
FirstBank
FEMBI
CrossCountry Mortgage
SunWest Mortgage

Don’t wait to make your homeownership dreams a reality.

Contact Colibri Realty to start your home search today.