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Getting Pre-Approved


The Pre-Approval Process


Shopping for a home in today’s housing market can be a challenging process.  If you don’t know what you can afford, its even tougher.   For many buyers, there is some fear and anxiety associated with making the financial commitment of a home purchase.   By completing a thorough preapproval process, buyers can get more educated and confident about buying a home. 

To preapprove you, lenders look at your income, assets and credit score and determine what loans you could be approved for, how much you can borrow and what your interest rate might be.   At the McLellan Team, we like to begin the process by completing a discovery call which allows us to get a better understanding of your financial goals, your overall situation, your time line and things such as your anticipated future income.  


Loan Application

The loan application is the key component to any preapproval. Most lenders will give you the option to complete an application over the phone or online.  During the preapproval process, lenders will also run your credit to review your credit history and gather information about your monthly obligations such as credit cards, car payments, and student loans.  After completing the application process, you will need to provide the supporting documents that are listed on the loan application.   Examples of the type of documentation needed are listed below.

  • Proof of Income

  • Employment Verification

  • Proof of Assets

  • Credit History

  • Identification

  • Evidence of Insurance

Most lenders will provide you with a preapproval checklist but below are the commonly requested items:

  • W-2 Statements

  • Pay stubs

  • Bank statements

  • 2 years of tax returns

  • Driver's License

  • Social Security number

Why is Preapproval so important?

Preapproval has many benefits, including:

  • Making it easier to look at homes available on the market. Most agents today require a preapproval to show you a property.

  • Preapproval letters make your offer much stronger. Sellers want strong offers that won't fall through and a preapproval letter shows the dollar amount you are able to borrow as well as your down payment amount.

  • By doing the heavy lifting upfront with a preapproval, you can hopefully avoid any issues popping up during the transaction.

  • Knowing exactly how much money you qualify for is highly beneficial to you as a buyer, as it can help narrow down and focus on your best options.

Preapproved vs. Fully Approved

A preapproval means your loan has been reviewed for eligibility for a home loan. The preapproval is typically subject to being fully underwritten by an underwriter who needs to provide a formal approval. Depending on the lender, some preapprovals are more accurate than others.

However, when your loan has been approved by an underwriter, the loan is closer to having a guaranteed approval. Many lenders don't offer fully underwritten loan approvals without a property contract. It is important to ask your lender whether this is an option for you.

Signing a Contract

You have been Pre-approved, So what is next?

Once you have been preapproved, it is time to go out and start shopping for a home. 


Learning about current inventory levels, recent sales in the area and overall market conditions will help you define your offer strategy.  In a seller's market where there is more demand than homes for sale,  buyers may be pressured to release their loan contingency.  It is recommended to speak with your lender about releasing any contingencies in your offer. 


Seasoned mortgage professionals can advise on the best offer strategies based on current market conditions.  Some lenders work with buyers to help them gain a competitive advantage over the others buyers in the marketplace.  Ask your lender what strategies they can offer to not only get you preapproved but help you get a property under contract.   

Let's get started.

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