Pre-Approval Letter

What is a Pre-Approval Letter?

A pre-approval letter is a document that states the amount a lender thinks you will be able to borrow. It is based on your income, credit profile, and expenses. Lenders will take into consideration how much money you will put down on the house, job history, and debt to income ratio.

Example of a Conservative Debt to Income Ratio:

Your housing payment portion of your income should be 31%. So, if you annual income is $60,000 your monthly gross (money before taxes) income is $5,000. This means your monthly mortgage payment should be no more than $1550.

Do Your Homework:

Your lender will want full documentation that shows income verification and assets. Listed below are required documents needed for a pre-approval letter.

  • Tax returns
  • W2 statements
  • Bank statements
  • Employer name and address
  • If you are renting, the name and address of landlord

Benefits of Pre-Approval Letter:

Once you have established a rapport with a qualified lender, they will continue to guide you through the financial process of securing a home loan. They will advise you on how to handle your money during the home buying process. They will also lock in your interest rates, and explain in detail your loan options.

  • Increase your home buying power
  • You will have completed a credit check
  • Identify any flaws on your credit report and fix them
  • You will have all your mortgage documents in order, and this will expedite your home buying process once you make an offer.

Helpful Hints:

  • Be honest about your finances
  • Know your monthly / annual household budget, this will help determine your comfort level for your monthly mortgage payments.
  • Be sure to include annual property taxes and homeowners insurance in your budget
  • Have an emergency fund set aside to cover at least three months of mortgage payments

Owning a home is an investment that can be passed on for generations, and now is the time to buy. There are beautiful houses in Long Beach waiting to be your next Dream Home. Let the experts of The Shannon Jones Team help you through this process.






About the Author

Shannon Jones has been selling real estate since 1998 and specializes in listing and marketing homes. She has consistently been one of the top Realtors in the Long Beach area. Prior to her award-winning career in real estate with the Shannon jones Team, Shannon has had successful careers in journalism and public relations. She holds a bachelors degree from UC Irvine and a masters degree from UC Berkeley. Shannon holds E-Pro, CDPE (Certified Distressed Property Expert), and PSC (Pre-Foreclosure Specialist) certifications. Shannon is very personable and maintains a very strong moral compass, always putting the best interest of home buyers/sellers above monetary goals. A California native, Shannon enjoys gardening, travel, reading, cooking and poker when she’s not selling homes MY DESIGNATIONS Lic# 01247705 | CDPE (Certified Distressed Property Expert) | E-Pro | PSC (Pre-Foreclosure Specialist) MY SERVICE AREAS Anaheim Bellflower Buena Park Carson Cerritos Cypress Downey Fountain Valley Garden Grove Huntington Beach La Palma Lakewood Long Beach Los Alamitos Los Angeles County Norwalk Orange County Rossmoor San Pedro Seal Beach Signal Hill South Bay Westminster

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