How to Get Pre-Approved for a Mortgage

Apr 22

Buying a home is one of the largest financial decisions you'll make. Getting pre-approved for a mortgage is the first step in the process. A mortgage pre-approval not only gives you a clear idea of how much house you can afford but also makes you a stronger buyer to sellers. Here’s a step-by-step guide on how to get pre-approved for a mortgage.

1. Know Your Credit Score

Your credit score is a key factor that lenders consider when determining your mortgage eligibility. A higher credit score can help you secure better interest rates. Before applying for pre-approval:

Check your credit report for errors and dispute any inaccuracies.
Pay down outstanding debts to improve your score.
Avoid opening new credit accounts or making large purchases before pre-approval.

*Credit Karma and similar tools are great ways to gather this information. Just know that the scores their algorithms generate can vary from the scores generated by all three credit bureaus

2. Gather Financial Documents

Lenders require various documents to assess your financial situation. Make sure you have the following items handy:

Proof of income (pay stubs, W-2s, tax returns from the past two years)
Some scenarios require Written Employment verification prior to preapproval
Most recent Bank statements covering 60 days
Debt and asset information (rental properties, child support/alimony, etc.)
Identification documents (such as a driver’s license or passport)

3. Determine Your Budget

Before seeking pre-approval, assess how much house you can afford. What is your comfort level with your monthly payment? Consider factors such as your down payment, monthly expenses, and potential future costs (childcare, student loans, etc.). Use my online mortgage calculator to estimate your monthly mortgage payments based on different loan amounts and interest rates.

4. Have a Conversation With Me

At this point, you need to have a conversation with your favorite mortgage lender. In all honesty, I would tell you to even shop around a bit for different lenders.

Research different lenders, including banks, credit unions, and mortgage brokers.

Find out which lender best suits your needs. What program makes sense to you? Are you comfortable with this person handling your finances?

I’m confident that the suite of wholesale lenders and programs I have available, as well as my competitive pricing, will become apparent on your journey.

5. Submit Your Pre-Approval Application

Once you’ve decided that I’m your lender, complete the mortgage pre-approval application. This process usually involves:

Providing personal and financial details
Authorizing a credit check
Submitting the necessary documentation depending on your unique circumstances

I will review your information and determine the maximum loan amount you qualify for, as well as what loan amount would get you a payment within your comfort zone.

6. Receive Your Pre-Approval Letter

If approved, the I will issue a pre-approval letter stating the loan amount you qualify for. This letter:

Shows sellers and real estate agents that you are a serious buyer
Gives you an advantage in competitive housing markets
Helps streamline the mortgage approval process once you make an offer

7. Maintain Financial Stability

After getting pre-approved, avoid major financial changes, such as changing jobs, making large purchases, or taking on new debt. These actions could impact your pre-approval status and affect your final mortgage approval.

Conclusion

Getting pre-approved for a mortgage is a crucial step in the home-buying process. It helps you understand your financial standing, strengthens your position as a buyer, and ensures a smoother transaction. By following these steps, you can confidently navigate the mortgage process and move closer to owning your dream home.

Are you planning to buy a home soon? Start your mortgage pre-approval process today and take the first step toward homeownership!