Financing Your Idaho Home, What Is A Pre-Approved Home Loan?

Financing Your Idaho Home

People forget about the colossal financial obligation of purchasing a home at their risk. Getting your mortgage pre-approval from a lender is important. Having their stamp of approval saves you the grief of looking at houses you can't afford. For more on financing your Idaho home here are a few tips for dealing with the dollar signs so that you can purchase that new home.

What is a mortgage pre-approval?

Mortgage pre-approval is a commitment from a lender to provide you with home financing up to a certain loan amount—basically, the stamp of approval that you have the money, credit history, and other credentials to buy a home up to that price.

Get pre-approved

By getting pre-approved for financing your Idaho home, you can save yourself the grief of looking at houses you can't afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.

How do I get pre-approved for a mortgage?

Be prepared to offer up a pile of paperwork to earn your pre-approval. In general, the paperwork you’ll need to assemble for your lender includes the following:

60 days or a quarterly statement of all of your asset accounts, which include your checking and savings, as well as any investment accounts such as CDs, IRAs, and other stocks or bonds

Pay stubs from the past 30 days showing your year-to-date income
Two years of federal tax returns
Two years of W2 forms from your employer
Residential history for the past two years, including landlord contact info if you rented
60 days or a quarterly statement of all of your asset accounts, which include your checking and savings, as well as any investment accounts such as CDs, IRAs and other stocks or bonds
Any other current real estate holdings

Pre-approval vs. pre-qualification and what is the difference?

Mortgage pre-qualification is not the same as a pre-approval. Pre-qualification is based solely on verbal information you tell a lender about your income and savings. So, it shows how much you could presumably borrow, but it's not a guarantee. You will have to get officially approved when financing your Idaho home loan later on and cross their fingers it works out.

A mortgage pre-approval, on the other hand, means the lender has already done its due diligence and is willing to loan you the money. Plus, you've got an official letter from your lender saying so that will speak volumes to a seller.

How getting pre-approval from your lender helps you buy a home.

When sellers accept an offer, they want the deal to go through. However, if the buyer isn't pre-approved for a loan, this can put the whole deal in danger. After all, if the loan doesn't get approved, the you'll will likely be unable to follow through, and the sellers will have to restart the on market sales again.

The pre-approval provides an extra measure of insurance to a seller when financing your Idaho home. As a result, sellers will likely pick you as the buyer over someone without pre-approval and they won't have to hold their breath that the deal might not go through.

The fact is: While pre-approval is a pain, you'll have to get all that paperwork ready sooner or later anyway. Why not do it on the early side and get a head start on the competition and shop for your dream home with confidence?