When people begin shopping for their home, it is appropriate and educational to talk to one or more lenders to find someone they will feel comfortable working with before they make a commitment to purchase a home. It is appropriate to ask the lender for a Good Faith Estimate so you can compare different loan programs. When you are serious about buying a home, a pre-approval letter will show sellers you are serious. This will also save a couple of week's time in closing. Pre-approvals will involve a lot of paperwork gathering and sometimes credit issues to be resolved.

Pre-qualification: Not an approval but an estimate of what you can afford.

When you pre-qualify for a mortgage, the lender collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount.

Pre-approval: This is a mortgage commitment.

It uses the basic information from your pre-qualification as well as electronic credit reporting. It is a commitment to financing your home.

Prepare to apply for a loan:

1. W2s for the past 2 years
2. Most recent consecutive pay check stubs covering a 30-day period
3. Residence addresses - past 2 years
4. Names and addresses of each employer - past 2 years
5. Last 2 years' tax returns with all schedules, YTD Income Statement and Balance Sheet
6. Gross monthly salary
7. Last 3 months' bank statements for all checking and savings accounts
8. Names, addresses, account numbers and monthly payments on all open loans, including credit cards
9. Addresses of other real estate owned
10. Loan information on all real estate owned
11. Social Security Card
12. Driver's license with photo
13. If this is a VA loan, a VA Certificate of eligibility - DD214
14. Money for credit report and appraisal

Yes, this is is a lot of information, but this is the biggest purchase people usually make!

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