Before you can begin to search for a new home, you need to determine your budget and estimate how much you can afford. One of the most important factors in figuring out your financial budget is getting pre approved for a mortgage.

What is a Mortgage?

The first step towards financing a new home is getting pre-approved for a mortgage. A mortgage is an advance of money from your lender that will cover the finances of your new property. Over an extended period of time, you (the mortgage) must pay the bank back each month a percentage of the money they lent you plus interest, until the total sum is paid in full. This is how most homes are financed. .

Documents Needed:

When you apply for a mortgage, you will need to furnish information regarding your income, expenses and obligations. To save time, have the following items available for each borrower:

-Two Most recent pay stubs

-W2's for the last two years

-Federal Tax returns from the previous two years

-Bank Statements from the last two months

-Long-term debt information (credit cards, child support, auto loans, installment debt, etc.)

Repairing Credit Problems

At one time or another, most people have put blemishes on their credit reports. If your credit report is tarnished, here are a few suggestions you can do to repair the damage.

-Validate all the debts on your credit report

-Contact any creditors if debts are not valid

-Work with a mortgage professional to determine the most "at risk" accounts

Now that you've examined your credit report and are confident that you're in good shape, you're ready to choose between getting pre-approved for a mortgage or pre-qualified for a mortgage. Here's the difference:

Pre-approval uses basic information as well as electronic credit reporting to determine whether a lender will loan you money. If you are pre-approved for a mortgage, the lender has given you a commitment to support your new purchase.

Pre-qualification is not a mortgage approval but simply an estimate of what you can afford. When you pre-qualify for a mortgage, the lender also collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount. The lender has not yet committed to supporting your financial needs and, therefore, you have not received an actual guarantee of funds.

People who are pre-approved for a mortgage are more attractive candidates to the seller and have a better chance of getting the property when they make an offer. Of course, a lender will only lend you money if they're sure your credit is strong and they're confident you have the ability to pay them back. A bank checks your credit by studying your financial history, income, federal tax returns, pay stubs, and long-term debt information (such as credit cards, auto loans, child support, etc.) to determine if you are a good candidate for a loan. If your credit report is good, then you have an excellent chance of obtaining a mortgage. If not, then you must take the appropriate steps to improve your credit rating.

Of course, a lender will only lend you money if they're sure your credit is strong and they're confident you have the ability to pay them back. A bank checks your credit by studying your financial history, income, federal tax returns, pay stubs, and long-term debt information (such as credit cards, auto loans, child support, etc.) to determine if you are a good candidate for a loan. If your credit report is good, then you have an excellent chance of obtaining a mortgage. If not, then you must take the appropriate steps to improve your credit rating.

We invite you to visit with our preferred lender to discuss your pre-approval:

Ben Kaufman

Primary Residential Mortgage

801-319-3218 or loans4utah@gmail.com