To get pre-approved for a mortgage, potential borrowers must contact a bank or lending institution and complete an application process. The prequalification process assesses a person or couple's debt-to-income ratio based on financial records, according to U.S. Bank.Continue Reading
A pre-approved mortgage loan provides potential borrowers with an estimate of how much they may borrow to purchase a home. The prequalification process involves submitting copies of pay stubs for income verification; details about assets or supplementary income such as child support; disability and veteran benefits; and Social Security. The prequalification process may also require potential borrowers to detail debt, monthly expenses and tax records, notes U.S. Bank.
Potential borrowers may also have to submit divorce or marriage records as verification, purchase agreements, gift letters detailing the individual is not required to pay back money gifted to him and identification to verify a current address. The process also requires applicants to complete a loan application and pay an application fee that is typically non-refundable. The lending institution then evaluates the borrower's credit score, debt, income, assets, current real estate holdings and financial references. The process for a pre-approved mortgage letter is typically identical to the actual process involved in acquiring a mortgage loan, reports U.S. Bank.Learn more about Credit & Lending