Take the First Step: Mortgage Pre-Approval

The first step in the home-buying process is getting pre-approved for your mortgage. Mortgage pre-approval tells sellers that you’re serious about buying – and have the funds to do so.

Bell Bank Mortgage is known and trusted by area real estate agents and builders, and pre-approval can be the key to getting into your new home faster. Plus, with Bell there’s no cost for pre-approval, and no origination fee on most home loans, which can save you thousands of dollars in closing costs.

Follow these steps for an easy road to pre-approval.

STEP 1

Gather Financial Documents

While both pre-qualification and pre-approval help you estimate how much home you can afford, mortgage pre-approval is considered a more “official” step. For pre-approval, the lender verifies your information by pulling your credit report and credit score and reviewing financial documents (versus collecting basic information from you alone for pre-qualification).

In order to apply, you’ll typically need the following information:

  • Residence history for the past 2 years
  • Employer name(s), job title and dates of employment for the past 2 years
  • Current pay stubs covering a full, 30-day period
  • W-2s for the past 2 years (and 1099s and K1s, if applicable)
  • Federal tax returns for the past 2 years (all pages and schedules) and business tax returns (25 percent or more ownership), if self-employed
STEP 2

Get Pre-Approved for Your Mortgage

Once you’ve gathered the necessary documents, it’s time to choose a trusted mortgage expert near you.

After choosing a lender, you can apply online or schedule an in-person appointment to start the pre-approval process. Once you’re pre-approved, your mortgage lender can share your pre-approval letter with your real estate agent or builder, giving you the competitive edge when house shopping.

STEP 3

Determine Your Budget

After you’ve been pre-approved for your mortgage, work with your real estate agent to explore the type of home you want and decide where you want to live and which features are must-have and wish list items.

Make sure to set your budget (within your pre-approval amount) before shopping to avoid overspending. If you’re not comfortable determining a budget on your own, your Bell Bank Mortgage loan officer can help you crunch the numbers.

CalculatorTry our online calculators that take into account additional mortgage costs, loan information and your state and federal tax rate to help determine your maximum budget.

For more information – and answers to the top 10 most common mortgage questions – view our homebuying guide.

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Frequently Asked Questions

What is a mortgage pre-approval?
A mortgage pre-approval is often the first step in the home buying process. In addition to working with a real estate agent, prospective homebuyers most often work with a mortgage lender to get pre-approved for a home loan. The lender verifies the borrower’s information by pulling your credit report and credit score and reviewing financial documents to determine how much money the lender is able to lend the borrower toward a home.
How long does mortgage pre-approval take?

Generally, you should receive your pre-approval within 24 to 48 hours from the time you applied.*

Knowing the rapid pace of the housing market, Bell Bank Mortgage lenders work hard to deliver your pre-approval on-time, often even if that means working early, late and through the weekend.

*Exceptions may occur based on individual situation as additional documentation may be required for review.

What’s the difference between pre-qualification vs. pre-approval?
Mortgage pre-qualification often relies on the borrower to share some basic financial information with the lender, so the lender can determine a rough estimate how much home the borrower can afford.

Mortgage pre-approval, however, requires proof of information by pulling credit score, credit report, bank statements and other financial documents as verification. Pre-approval is considered a more official step in the home-buying process.
How long does mortgage pre-approval last?
The documentation used for preapproval, such as credit reports, paystubs, etc., expire after 120 days – at which time those documents must be updated and re-analyzed.

The industry standard for document expiration is typically 120 days, as outlined by Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).
What types of home loans can I get pre-approved for?

Borrowers can get pre-approved for all types of loans, including:

Conforming loans (often referred to as conventional loans), such as:

  • HomeReady program which extends qualifying income to others living in your home
  • BorrowSmartSM program* extending grants to help with down payments or closing costs
  • Home Possible® mortgagefor low- to moderate-income borrowers
  • First-time homebuyer bond programs*, including down payment assistance
  • Investment loans
  • Second home financing, including seasonal cabin* or vacation home loans which have different requirements than a loan for a primary residence

Non-conforming loans:

  • Federal Housing Administration (FHA) loans for people looking to buy their first home
  • Veteran’s Administration (VA) loans benefit qualifying veterans, service members and military spouses
  • U.S. Department of Agriculture (USDA) loans for buyers who want to purchase a home in a rural or suburban area (also called rural development loans)
  • Jumbo loans that exceed the conforming loan limit backed by Fannie Mae or Freddic Mac ($548,250 in 2021).

Construction lending:

  • New construction (including one-time-close loans*)
  • Lot loans*
  • Rehab home loans* to roll renovation costs into your mortgage

There are even county-specific programs and unique bank programs – such as Bell – Moving Forward, which offers greater flexibility on credit score qualifications (available in some markets).

*Not available in every market

What are the requirements for pre-approval?

Pre-approval requirements vary from lender to lender and can change and fluctuate month over month or year over year.

Generally Bell Bank Mortgage requires*:

  • Current credit report
  • Income verification (W2’s, paystubs & tax returns)
  • Asset statements
*Based on individual situation. May be required to provide additional documentation at time of application.
How do I get pre-approved for a mortgage?

Choose a Bell Bank Mortgage lender, and apply online or schedule an in-person appointment to start the pre-approval process. Your mortgage lender will ask for several documents before pulling your credit score and report.

Why do I need mortgage pre-approval letter before shopping for homes?

Realtors, real estate agents and builders often require a pre-approval letter before you start shopping, so they know you’re serious about home-buying (and not just window shopping).

Furthermore, a pre-approval letter tells the seller that – while not officially approved for the mortgage – you have met the requirements and have the funds to likely be approved for a home loan.