Getting pre approved for a mortgage is easy. All you have to do is have the following items ready when you apply for a pre-approval.
- Income Confirmation – If you are self-employed it’s the last 2 years’ Notice of Assessment and if you are salaried it’s the last 2 paystubs and some banks may also ask you for a letter of employment.
- Have a good credit bureau score – preferably over 650
- Have little or almost no other debt
It’s important for at least 2 of the above 3 to be string in order to have a good amount of pre approval. Meaning if your credit bureau isn’t so good but you have good income and barely any debt you may still get a pre-approval for a mortgage. Or if you have little income but you have no other debt and an excellent credit bureau score you may be pre qualified for a decent amount. Having the right mortgage agent also helps, because the agent will try and make it happen for you, legally.
It’s good to know what amount you would like to get pre-approved for, but if you don’t it’s ok. You can just tell your mortgage agent to pre-approve you for the maximum and you can take it from there. Once you know your maximum mortgage amount then it is easier to look for a property that you know you can afford 100%.
The reason the bank needs your income confirmation is because they want to make sure you can afford the mortgage and they are going to get their payments. The bank is not in the business of going after people’s houses, besides it’s a terrible experience for both parties.
Your credit score must be good for obvious reasons, not only does it show that you ability to pay back debt but it also shows your character, and good habit. It shows you are trustworthy.
The reason it is preferable that you don’t have other debt is because the other monthly payments will take up tighten up your pre-approval total. Meaning the other debt will make your pre approval amount less because you have other obligations to cover aside from your new mortgage payments.