Tools & Resources

Whether you’ve been searching for your next home for a few weeks or just beginning your home-buying journey, one of the most important things you can do is get pre-approved for a loan. Getting pre-approved shows sellers that you are a serious buyer and that you have the financial means to purchase their home. It also gives you an idea of how much you can afford to spend, which can help you narrow down your search and avoid overpaying for a home.

According to a recent study by the National Association of Realtors, 92% of home buyers who were pre-approved for a loan made an offer on a home within 30 days, compared to only 67% of those who were not pre-approved. Additionally, pre-approved buyers were more likely to win the bidding war on the home they wanted.

What is Mortgage Pre-Approval?

A Mortgage Pre-Approval allows you, the borrower, to know exactly how much home you can afford, the interest rate you may qualify for, and the estimated closing costs. During the Pre-Approval process, a mortgage lender will pull your credit history and verify your income, assets, and debt based on bank statements and pay stubs that you may be required to provide.

Once you get pre-approved, your lender will provide a Mortgage Pre-Approval letter detailing the type of home loan and loan amount you may qualify for. The Pre-Approval letter PHH Mortgage executes is valid for up to 90 days and may be extended if you are still searching after it expires.

See how much home you can afford with our mortgage affordability calculator.

Important to note: A Mortgage Pre-Approval is not full approval from your mortgage lender. Once you find your home, your lender will still need to approve certain property details and other information to guarantee your home loan.

Why Get Pre-Approved?

In today’s competitive market, many homes for sale have multiple offers coming in. What is going to make your offer stand out over another? A Pre-Approval will allow you to:

• Define your budget and allow your realtor to narrow your home search focusing on options that are best suited for you.
• Stand out amongst other shoppers. Being pre-approved shows sellers you’re ready to make an offer and that you’re a serious buyer.
• Get to closing quickly because your lender will have already reviewed a lot of your financial information.

What Do You Need to Provide for Mortgage Pre-Approval?

To start the Mortgage Pre-Approval process with PHH Mortgage you should have the following personal and financial information available when you’re ready to apply.

Mortgage Pre-Approval Checklist

• Identification – Valid driver’s license and Social Security
• Source of Down Payment – Proof of or source of funds for the down payment
• Paystubs – Two months of paystubs (requirement may be different for self-employed)
• Tax Returns – Your W-2 statements from the last two years (or business tax returns if self-employed)
• Assets – Bank statements, 401k, and investment account statements
• List of Monthly Debts – Your debt-to-income ratio (DTI) helps mortgage lenders determine if you’re able to take on more debt. Calculate your DTI by adding your recurring monthly debts and dividing this by your monthly pre-tax income. Monthly debts could include:
  • Car loans, student loans, credit cards, medical bills, personal loans, etc.
• Gift Letter – Is someone gifting money for your down payment? You may need a Gift Letter along with proof of funds from the donor

Once the checklist items have been provided, your lender will pull your credit report and verify your credit score. You can expect to hear from your lender within the same day or it could take up to 3 business days. 

If you’re ready to start your homebuying journey with a PHH Mortgage Pre-Approval, call 800-451-1895 to speak with a PHH loan officer.

Ready to get Pre-Approved?

Learn more about the PHH Pre-Approval process. 

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