Getting Pre-Approved for a Mortgage: Your First Step
You're ready to buy a house. You've been scrolling through listings, imagining your furniture in different living rooms, and mentally picking out paint colors. But before you start making offers, there's one crucial step you need to take: getting pre-approved for a mortgage.
If you skip this step, you're basically window shopping without knowing if you can actually buy anything. Let's talk about what pre-approval is, why it matters, and how to get it done.
What Is Mortgage Pre-Approval?
Pre-approval is when a lender reviews your financial situation and gives you a conditional commitment to loan you a specific amount of money. They'll verify your income, assets, credit, and debts to determine how much house you can afford.
It's not just an estimate or a guess—it's based on actual documentation and a thorough review of your finances. You'll get a pre-approval letter that states how much you're approved to borrow, which you can show to sellers when you make an offer.
Pre-Qualification vs. Pre-Approval: What's the Difference?
People often confuse these two, but they're not the same thing.
Pre-qualification is a quick, informal estimate. You tell the lender about your income, debts, and assets, and they give you a ballpark figure of what you might be able to borrow. No verification, no documentation, just a rough idea. It's better than nothing, but it doesn't carry much weight.
Pre-approval is the real deal. The lender actually verifies your information by reviewing pay stubs, bank statements, tax returns, and pulling your credit report. They're making a conditional commitment based on facts, not just your word. This is what sellers and real estate agents want to see.
Why Do You Need to Get Pre-Approved?
Getting pre-approved isn't technically required, but trying to buy a home without it is like showing up to a car dealership without knowing your budget. Here's why it matters:
Sellers Take You Seriously
In a competitive market, sellers might get multiple offers. If you're competing against other buyers who are pre-approved and you're not, guess whose offer looks stronger? Pre-approval shows sellers you're a serious buyer with financing in place, not just someone who's tire-kicking.
You Know Your Budget
Pre-approval tells you exactly how much you can borrow, so you're not wasting time looking at houses you can't afford. It also helps you avoid the heartbreak of falling in love with a home that's out of reach.
You Can Move Quickly
When you find the right house, you want to act fast. Having your pre-approval ready means you can make an offer immediately without scrambling to get your finances in order. In hot markets, this can be the difference between getting the house and losing it to someone else.
It Speeds Up the Closing Process
Since the lender has already verified most of your information during pre-approval, the final approval process goes faster once you're under contract. That means less stress and a smoother path to closing.
What Do You Need to Get Pre-Approved?
Getting pre-approved involves some paperwork, but it's not as overwhelming as you might think. Here's what lenders typically ask for:
Proof of Income – Recent pay stubs (usually the last 30 days), W-2s from the past two years, and possibly tax returns if you're self-employed.
Employment Verification – The lender may contact your employer to confirm you still work there and verify your income.
Bank Statements – Usually the last two months of statements to verify assets for your down payment and closing costs.
Credit Report – The lender will pull your credit to check your score and review your debt history. They'll see all your loans, credit cards, and payment history.
Identification – A government-issued ID like a driver's license or passport.
How Long Does Pre-Approval Take?
Pre-approval can happen pretty quickly. Once you submit all your documentation, it typically takes a day or less to get your pre-approval letter.
The key is having your documents ready to go. The more organized you are on the front end, the faster the process moves.
How Long Is Pre-Approval Good For?
Most pre-approval letters are valid for 90 days. After that, you'll need to update your information because your financial situation could have changed. Your income might be different, you could have taken on new debt, or your credit score might have shifted.
If you're still house hunting after your pre-approval expires, don't worry—it's usually a quick process to get it renewed with updated documents.
Tips for a Smooth Pre-Approval Process
Get your documents together early – Don't wait until you're ready to apply. Gather everything ahead of time so you're ready to move quickly.
Don't make big financial changes – Once you're pre-approved, avoid opening new credit cards, making large purchases, or changing jobs. Lenders will verify your information again before closing, and big changes can jeopardize your approval.
Be honest and thorough – Leaving out information or fudging numbers will only cause problems down the line. Be upfront about your finances from the start.
What Happens After You're Pre-Approved?
Once you've got your pre-approval letter, you're ready to start seriously house hunting. When you find a home you want to buy, you'll make an offer and include your pre-approval letter to show the seller you're financially qualified.
After your offer is accepted, the lender will do a full underwriting review, order an appraisal, and verify all your information one more time before final approval. As long as nothing in your financial situation has changed, you should be good to go.
Ready to Get Pre-Approved?
Getting pre-approved is the first real step toward homeownership, and it doesn't have to be stressful. I'll walk you through the process, help you gather the right documents, and get you approved so you can shop with confidence.
Let's get started. Reach out today and let's get you pre-approved and ready to find your dream home.
