If you’ve started the house hunting process, the first question your real estate agent probably asked you is if you are paying cash or if you require financing for your purchase. If you require financing, your agent’s next question is always “Are you pre-approved?” A pre-approval tells your agent that your credit, income, and employment history have been reviewed and that you are eligible to purchase a home. Most realtors will not take you inside your first house if you haven’t been pre-approved.
In order for a loan officer to pre-approve you, he or she will have you complete an application and provide some initial documentation. If you’re about to begin this process, here’s what you need to start rounding up:
- Most recent 2 years of W-2s*
- Most recent 2 years of tax returns*
- Pay stubs for the last 30 days
- Your previous two months bank/financial statements for all accounts
- If self-employed and/or receiving rental income—last two years personal and business tax returns
- If self-employed—year to date un-audited profit/loss statement for each business
- Rental leases for all properties owned that are being rented
- If applicable, complete bankruptcy documents (if discharged fewer than 10 years ago)
*Tip: If you are unable to locate your W-2s or tax returns, call 1-800-829-1040 and press zero until your call is answered to request copies.
I know it’s a pain gathering all of the items for your loan officer, especially if you’re just toying with the idea of buying a house; however, a good loan officer will insist on reviewing the above documents before issuing a pre-approval. Something on your banks statements, tax returns, or pay stubs could delay or even prevent you from closing on your home. Better to be safe than sorry!
I would also hesitate to work with an agent who does not require a pre-approval before showing you houses. Experienced agents typically do not spend their time and efforts on clients who are not pre-approved.
If you located in Virginia or on the East Coast, don’t hesitate to email me at email@example.com to get started with your pre-approval. Also, if you’re looking to meet one of the best realtors in Richmond VA, I work with many of them and would be happy to get a feel for your needs and connect you with one who specializes in your desired location and/or property type.