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Understanding Mortgage Preapproval with O1ne Mortgage

Are you ready to embark on the journey of buying a home? At O1ne Mortgage, we are here to guide you through the process, starting with mortgage preapproval. Call us at 213-732-3074 for any mortgage-related needs.

What Is a Mortgage Preapproval?

A mortgage preapproval is a document from a lender indicating that you are conditionally approved for a mortgage loan up to a specific amount. This document usually specifies the type of loan you qualify for and the interest rate the lender would charge upon completing a full mortgage application. Essentially, applying for preapproval involves the lender assessing your income, assets, debt, and employment history, as well as reviewing your credit report and score.

How Soon Should I Get Preapproved for a Mortgage?

It’s generally best to get a preapproval letter before you start looking at homes seriously. This can help you understand how much home you can afford and give you a competitive edge if multiple buyers submit offers on a home. However, remember that most preapprovals only last up to three months, so timing is crucial. You don’t want your preapproval to expire before finding your ideal home.

How to Get Preapproved for a Mortgage

The preapproval process is straightforward and can usually be completed online. Follow these steps to obtain a mortgage preapproval letter:

1. Check Your Credit

Review your credit report and score before your lender does to identify and address any issues. You can access your credit reports for free at AnnualCreditReport.com. Generally, you’ll need a credit score of at least 620 to qualify for a mortgage.

2. Gather Your Financial Information

Collect your financial documents, including those related to employment, income, and assets. This will help your application process go smoothly. Be prepared to submit recent pay stubs, account statements, and your past two annual tax returns.

3. Choose Your Lender

Compare at least three mortgage lenders to discover the different types of loans available. Getting preapproval from multiple lenders can help you find the loan with the lowest interest rate and fees, potentially saving you thousands of dollars over the life of the loan.

4. Receive Your Preapproval

Once you’ve supplied all required documents, a preapproval decision could take as little as one day, but typically takes a day or two longer. Include a copy of your preapproval letter with every offer letter you submit.

Does a Mortgage Preapproval Affect Your Credit Score?

When you apply for preapproval, your lender will check your credit, which can impact your credit score. This credit check causes a hard inquiry to appear on your credit report, which can cause a slight drop in your score. However, if you apply for preapprovals with multiple lenders in a short period, your credit score won’t be negatively affected each time.

The Bottom Line

A mortgage preapproval letter can give you a competitive advantage when placing an offer on a home. However, since most approvals last a maximum of 90 days, it makes sense to get your preapproval letter only when you’re truly ready to search for a home and make an offer.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We are here to help you every step of the way.

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