You have made the brave decision to purchase a new home and you are now eager to go house-hunting. However, before you begin scheduling showings and browsing through local listings, it is important to understand how to get a loan in Virginia.
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Here is what you should know about getting a loan in Virginia, from mortgage pre-approval to closing:
1. Check Your Credit Score
It is important to have an idea of how your financial situation is likely to position you in the eyes of those giving out mortgages before ever approaching any lender. So, check your credit score to see where you stand today.
You are entitled to a free annual credit report from TransUnion, Experian, and Equifax, which are the 3 major credit reporting bureaus in the U.S. If your score is above 720, you can qualify for a variety of mortgages and decent interest rates.
Knowing your credit score beforehand will help you better prepare for the amounts, types of loans, and the interest rates that you can expect lenders to offer you.
2. Gather the Required Documents
You will be required to provide a great deal of financial information when you apply for your loan regardless of whether you are using a credit union, traditional bank, or another mortgage lender. Some of the key documents you should have are:
- W-2 Forms
- Tax Returns
- Social Security Number
- Photo ID
- Investment Statements
- Bank Account Statements
- Pay Stubs
- Other Mortgage Statements
All the documentation above will be provided to the lender during pre-approval and may have to be updated during the final mortgage approval; process.
3. Pre-Qualification
Getting pre-qualified is the first step in the mortgaging process. It does not actually require strict proof of income, but it can be an excellent starting point when searching for a home to buy.
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Pre-qualification involves getting interviewed by the lender about your income, expenses, and assets. While it isn’t necessarily an official process and does not actually indicate whether or not you will be approved for the loan when the time comes, it can help you get a better idea of the amount of loan you can afford once the time comes.
The information gathered during pre-qualification can help direct you towards properties within your price range and narrow your search, leading to a faster and less frustrating process for you.
4. Pre-Approval
Mortgage pre-approval is the final step before finally getting a loan in Virginia. While it isn’t a mandatory part of the process, pre-approval can help put both your mind and that of the seller at ease.
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To secure pre-approval, you will be required to provide all that important documentation such as identifying information, proof of assets, and proof of income to the lender. The lender will then pull your credit report and use all the available information to decide whether you qualify, how much of a loan you actually qualify for, and at what rate of interest.
With that information in hand, you can more confidently put a solid offer down on your preferred property, getting a step closer to move-in day.
5. Securing Commitment
Once you have mortgage pre-approval and have an accepted offer on a property, the lender will assess the value of the property that you plan to buy.
With all that information in hand, the lender will then issue an official commitment to lend you a particular amount of money at a certain interest rate. The determination typically comes in 1 of 4 forms:
- Approved
- Approved with Conditions
- Suspended
- Denied
The chances of receiving a Denied or Suspended will be much lower if you have pre-approval. Once you receive this approval, you will be well on the road to final closing day and your new property.
Getting a loan in Virginia might be stressful, but with the help of trusted, experienced agents, the entire process is usually easier. Allow us to partner with you in finding your dream property. Contact us at 800-599-1563 today!