Navigating the Pre-Qualification Process with Renasant Mortgage Lending

Becoming pre-qualified for a home loan can be key to purchasing your perfect home. The financial picture that emerges during the pre-qualification process can give you confidence as you head into this major investment. In contrast, buyers who search for and find a home and then hope to be approved for a mortgage may miss opportunities.

Buyers often miss out on purchasing their perfect homes while waiting for their mortgage loans to be approved! Don’t let this happen to you. Instead, work with a Renasant Mortgage Banker to get pre-qualified for a home loan, which can make the actual loan application and approval process much easier. With the right mortgage banker and an understanding of the mortgage lending process, your dream home could become a present reality.

Why Should I Seek Pre-Qualification for my Home Loan?

The usual process of shopping for and purchasing a home can seem backward at times. Most people have a set of criteria they are looking for in a home. Then they engage in an often long and arduous process of viewing multiple homes and weighing the pros and cons of each. When the perfect home finally becomes available, people begin the approval process for a mortgage. However, in most cases, a buyer cannot make a formal offer until their lender provides a pre-qualification or pre-approval letter. Until your offer is accepted, another buyer—one who is already approved for a loan—often swoops in and purchases the home. Having a pre-qualification letter in hand in advance of choosing a home can prevent this disappointment.

If you’re pre-qualified for a home loan, you can confidently place a bid on a home. Pre-qualification also ensures buyers have a sense of their loan amount. Shopping for a home without this number in mind often leads to buyers wasting time viewing homes beyond their price range. Mortgage pre-qualification allows the time you devote to shopping for your perfect home to be well spent and, when you find that ideal home, you can quickly place an offer.

How Do I Get Pre-Qualified for a Mortgage?

Lenders, such as Renasant Bank or Renasant Mortgage Lending, request several specific forms of verification and identification to become pre-qualified for a home loan. Getting these details organized ahead of seeking pre-qualification is essential. First, a buyer must supply proof of income. This includes proof of employment income, which for most people is a W-2 form less than two years old and recent pay stubs. These pay stubs should show both income and recent income. Proof of any other income, such as bonuses or alimony, may also be required. In addition, pre-qualification usually requires a review of your previous two years’ tax returns.

Buyers must also supply proof of their assets, including bank statements and investment account statements. Your bank examines these statements to ensure that the homebuyer is able to pay for the down payment and the closing costs associated with the home purchase. The bank may also seek to ensure that the buyer has access to cash reserves.

A credit report is also required for pre-qualification for a mortgage loan. The bank will order a credit report, but buyers can also request a credit report, for their own review, from any of the three credit reporting agencies: Experian, TransUnion, and Equifax. Banks also require a driver’s license, or other proper government ID, and social security number. If you are applying for a mortgage with your spouse, both of you are required to supply these documents.

What Does the Pre-Qualification Process Look Like?

The first step toward pre-qualification is to gather all of your documents. This provides you with an accurate picture of your financial situation and will aid your bank in beginning the pre-qualification process quickly. After organizing your finances, you’re ready to apply for a mortgage. At this stage, it’s a great idea to schedule a meeting with a mortgage banker. These bankers have detailed knowledge of the steps to secure a mortgage loan. They can answer your questions about the percentage rates being offered, the terms of various loans, and which loan might best suit your needs. Mortgage bankers can help you assess your financial situation and give you invaluable guidance as you prepare to invest in buying a home.

In response to a pre-qualification request, a bank will issue you a pre-qualification letter. It will describe the general terms of the loan for which you are pre-qualified, such as a loan amount and purchase price. 

What Happens After I Am Pre-Qualified for a Mortgage?

After you have received your pre-qualification letter and reviewed all the details of your loan, you are ready to make an offer on a house. After you make an offer, your bank will underwrite your loan application. The bank will ensure that your financial situation hasn’t changed, order an appraisal if it is required, verify information and documentation, and fully underwrite your loan application. Your bank may call your employer to verify employment or your bank may ask for additional documentation at this stage. If everything checks out, you’re approved for a home loan!

What Can I Do to Prepare For Pre-Qualification?

Taking steps to improve your financial situation before applying can make the pre-qualification process go more smoothly. Working to clean up your credit and improve your credit score is one way to improve your chances for pre-qualification. This includes eliminating errors on your credit report and ensuring that your report is free of fraudulent charges. Payment history is also an important contributor to your credit score, so be sure to make payments on time. Automating your payments is one easy way to do this.  

Saving for a down payment is another important factor in becoming approved for a mortgage loan. The larger your down payment, the less you owe toward the purchase price of your home and the smaller your monthly payment, but having a substantial down payment can also increase your chance of receiving a loan. That said, Renasant offers many low down payment options to first-time homebuyers and others. 

Pre-qualification for a home loan grants you bargaining power. When you already have your financing secured, you can make a compelling offer the moment you discover your perfect home. Renasant Bank’s Mortgage Bankers are ready to help you with the process of getting pre-qualified, so this bargaining power can be yours!