When buying a house, one of your first steps will be to secure a pre-approved application with a lender. Being pre-qualified only, does not give you the same advantages. The difference between the two is: pre-qualified is only an estimate by a lender of the loan amount you can afford, no documentation is required at this point. Pre-approval requires documentation by the lender resulting in a commitment for the loan amount. Becoming pre-approved will increase your buying power, eliminating any unforeseen financial problems after an offer has been made, and give you an accurate idea as to your housing price range. Sellers will know that you are serious about purchasing a house.

Documentation Required By The Lender

When seeking pre-approval, there is certain documentation that your lender will need:

1. W-2's for the past 2 years
2. Two most recent paycheck stubs
3. Tax returns for previous two years
4. Documentation of any other income if using to qualify
5. Two years of current resident history
6. Employment history for past two years
7. Social Security Numbers
8. Last three months statements for all investment accounts
9. Last three months statements for all checking and savings accounts
10. Copy of most recent statements for all retirement accounts and life insurance policies
11. Automobiles owned - Make and model and current market value
12. Names, account numbers, current balance, and monthly payments on all debt, including car loans, credit cards, personal loans, and student loans
13. Information and payments on child support and alimony
14. Addresses and loan information on all real estate owned
15. Gift letter - If your source of down payment is a gift, a signed letter is needed from the donor to verify that you are not required to repay the funds.
16. Application fee for credit report and appraisal