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It’s no secret that New York home sellers have quite the variety of buyers to choose from so it’s important to make sure that your offer stands out from the crowd. The best way to get the competitive edge you’ll need in this competitive market is to get pre-approved for a mortgage. The resulting pre-approval letter lets home sellers and real-estate agents know that you’re serious while alerting lenders that you may be taking out a mortgage soon.

Know How Much You Can Borrow 

It’s easy to get caught up in the excitement of your search and look for homes outside of your budget. Getting pre-approved can help you set realistic expectations for your finances so you can focus on homes within your price range. It’s important to review your budget and make sure that your loan amount is one that you’re comfortable with. 

Make a Competitive Offer

Getting pre-approved for a mortgage lets sellers know that a lender has reviewed your current financial situation and determined that you can afford to buy a house. As a result, sellers can be confident that the process is unlikely to get derailed because you can’t secure the proper financing. 

Be Aware of Potential Problems

While each lender’s process can vary, many will review your credit history, income, and assets before granting a pre-approval. Many people realize that there’s some work to do before making their first offer. From paying down debts, saving for a larger down payment, or resolving inaccuracies on your credit report, it’s important to take care of any potential issues before you make an offer.  

Paperwork Needed for a Pre-Approval

Before a lender will pre-approve you for a mortgage, you’ll need to supply them with the following paperwork:

  • Two months of pay stubs or other proof of income

  • W-2s (or 1099s) from the past two years

  • Tax returns from the past two years

  • Two months’ worth of statements from every bank, investment, savings, and retirement account you have

  • Social Security number and photo ID

  • Proof of any other assets you own

  • Two years of residential history, potentially including contact information for your landlord(s) 

After securing your pre-approval letter, it’s usually good for 3-6 months and extendable beyond that. That should be plenty of time to find your perfect home in New York- with a great real-estate agent, of course.