Get Preapproved for a Mortgage

Getting Preapproved for a Mortgage: Your Essential First Step

Once you’ve selected a REALTOR® to guide you through one of the most significant financial transactions of your life, the next crucial step is obtaining a mortgage preapproval.

Why Get Preapproved Before House Hunting?

Obtaining a preapproval before you start your home search is essential because:

✅ You Need It to Make an Offer – In competitive markets, sellers won’t take offers seriously without a preapproval letter.
✅ It Defines Your Budget – Preapproval provides clarity on how much home you can afford, including your monthly mortgage payment, qualifying interest rate, property taxes, and insurance.
✅ It Speeds Up the Buying Process – A preapproved buyer is seen as more reliable, increasing your chances of a smooth, stress-free closing.

Choosing the Right Mortgage Lender Matters

Not all lenders are created equal. Working with a highly qualified and reliable lender ensures a seamless transaction, while an unresponsive or disorganized lender can:

❌ Cause Delays – If your lender doesn’t secure full approval on time, you could miss out on your dream home.
❌ Cost You More – A lender with higher-than-market interest rates could cost you thousands of dollars over the life of your loan.
❌ Jeopardize the Deal – A poorly managed approval process can lead to a denied loan, even after your offer has been accepted.

We can connect you with trusted mortgage lenders who consistently deliver exceptional service and competitive rates. Let us know if you’d like an introduction!

Documents Needed for a Mortgage Preapproval

Every lender may have slightly different requirements, but you should be prepared to provide:

✅ A Completed Mortgage Application (Form 1003) – Request a direct application link from your lender (avoid applying on general lender websites, which may route you to a non-local office).
✅ Recent Asset Statements – Provide statements for the past two months (or last quarterly statement) for checking, savings, 401(k), IRA, brokerage, and mutual fund accounts.
✅ Proof of Income (W-2 Employees) – Two most recent consecutive pay stubs.
✅ W-2 Forms – Past two years (e.g., 2023 and 2022).
✅ Tax Returns – Past two years of federal tax returns (all pages, signed).
✅ Corporate Tax Returns – If self-employed and owning 25% or more of a business, provide past two years of business tax returns (all pages, signed).

Understanding Your Preapproval Letter

Once you submit the required documents, you can generally expect a preapproval letter within 2-3 business days. Your lender may request additional documentation due to today’s stricter underwriting standards—this is completely normal.

Your preapproval letter will state the maximum home price you qualify for, but it’s just as important to understand your monthly mortgage payment (including PMI, taxes, and insurance) to ensure it aligns with your budget.

As soon as you receive your preapproval letter, please send it to us so we have it on file and are ready to submit offers when the time comes.

Down Payment Assistance & Home Buying Grants

Not all lenders specialize in down payment assistance programs, but it’s always worth asking. Assistance options typically fall into three categories:

1️⃣ State-Approved Lender Programs – Available through specific lenders.
2️⃣ Lender-Specific Programs – Some lenders offer their own in-house grants.
3️⃣ City/County Programs – Available regardless of the lender, though they often have stricter income requirements and require you to apply directly with the city/county.

If you’re interested in down payment assistance, we can guide you in finding the best options available.

Loan Estimates & Closing Costs

Once you apply for a mortgage, lenders are required to provide you with a Loan Estimate (LE) within three days, outlining:

✅ Your estimated interest rate
✅ Your monthly payment
✅ A breakdown of closing costs

Typically, closing costs range from 4-6% of the home’s purchase price. This is separate from your down payment.

For example, if you’re purchasing a $500,000 home with 20% down:
$100,000 – Your down payment (20%)
~$25,000 – Estimated closing costs (5%)
Total Cash Needed at Closing: ~$125,000

Some closing costs, like the appraisal and home inspection, must be paid before closing.

Need a detailed estimate for New Jersey or Pennsylvania? Check out these closing cost estimates.

How to Get the Best Mortgage Rate

Since every lender offers different interest rates and fees, it’s wise to compare at least two lenders.

Tips for Shopping Your Loan:

🔹 Have lenders pull your credit on the same day – Multiple credit inquiries within a short window won’t hurt your credit score as much as inquiries spread over weeks.

🔹 Compare rates on the same day – Rates fluctuate daily, so comparing lenders on different days is like comparing apples to oranges.

🔹 Understand the full picture – Ask about lender fees, loan terms, and any discount points that could impact your total cost.

Questions about mortgage preapproval? Give us a call at (856) 283-2338 or email us at info @ quartermangroup.com—we’re happy to guide you through the process!