Pre-approval is the process of learning how much a lender is willing to lend you. When you apply for a pre-approval, lenders make this decision by looking at your income, assets, and credit. This information will also help determine your interest rate.

Although similar in name, a pre-approval should not be confused with a pre-qualification.  Pre-qualifications are less accurate than pre-approvals, because they don’t require asset verification. While a pre-qualification can be helpful, it won’t give you the most accurate idea of how much money you can borrow, whereas a pre-approval can

Getting pre-approved for a loan and knowing the amount of money you will receive will help you narrow your property search, and make you more appealing to both sellers and real estate agents.

The first thing you do when you apply for a pre-approval is answer a series of questions about yourself, your income, your assets, and the home you want to buy. You then give your lender permission to look at your credit report.

Your credit report is a record of your borrowing history from any lenders and creditors you’ve worked with in the past, including credit card companies, banks, credit unions, and more. 

After we verify your credit, East Wisconsin Savings Bank will give you a few mortgage options that you can customize to fit your needs. We’ll show you a few different mortgage solutions and how much money you can qualify for. You can also learn more about your individual interest rates, loan types you are eligible for, monthly payments, and down payment requirements.

The pre-approval process is essentially a mortgage application. This means your lender will want to take a comprehensive look at your finances. You should be prepared to provide information on the following:

• Identification
• Proof of Income
• Employment Verification
• Proof of Assets
• Credit History
• Debt-to-Income Ratio 
  

Before starting the pre-approval process, you’ll want the necessary documentation to ensure the process goes smoothly. Here are a few items you should have ready access to:

• Driver’s License or other government-issued identification
• W-2 Statements
• Pay Stubs
• Bank Statements
• Social Security Number
  

Once you’ve submitted all your information to your lender, you can expect to receive your loan estimate within 3 business days. The loan estimate will let you know whether you’ve been pre-approved and for how much.

Once you’ve been pre-approved for a mortgage, we will issue you a Pre-Approval Letter that you can use to begin house-hunting.

Now comes the best part – finding the home that’s right for you! To help with your search, try connecting with a real estate agent in your area, especially if you’re buying your first home. A real estate agent can help you narrow your search and show you properties that fit both your needs and your budget.

Once you find the right home, your realtor will also help you submit an offer, and potentially begin negotiating with the seller.

When the seller accepts your offer, it’s time to move to the final steps of the home buying process.

You may choose to contract with a home inspector who will provide information about the home’s condition and recommend repairs to hep avoid potential surprises down the road.

Work with an insurance agent to get homeowner’s protection on your property. You should also provide your inspection information.

The appraisal gives you an unbiased opinion of the fair market value of a home. Your lender will use this to determine if the home’s sale price or refinance value is appropriate. You will receive a copy of the appraisal report.

During the verification process, an underwriter takes a closer look at your assets and finances. You’ll provide documentation and paperwork that backs up the information you submitted when you applied. Your lender will also need to verify your property details. This usually involves ordering an appraisal, verifying the home’s title, and scheduling any other state-required inspections.

As soon as underwriting is completed, you will receive a document called a Closing Disclosure. Your Closing Disclosure tells you everything you need to know about your loan, including your monthly payment, down payment, interest rate, and closing costs. Make sure that your Closing Disclosure is similar to your Loan Estimate, which you should have received from your lender three days after you applied for your loan.

Once your loan is approved, it’s time to attend a closing meeting. At closing, you’ll have a chance to ask any last-minute questions you may have about your loan. Remember to bring your Closing Disclosure, a valid photo ID, your down payment, and a check for your closing costs. Once you sign on your loan, you are officially a homeowner!