The Skinny on How to Get Pre-Approved for a Mortgage

The Skinny on How to Get Pre-Approved for a Mortgage

What is a Mortgage Pre-approval?

One of the best things you can do before starting your home search is to understand how to get pre-approved for a mortgage. A pre-approval is an assurance from your mortgage lender that you are qualified to borrow up to a certain amount of money at a specified interest rate, subject to requirements such as a property appraisal and more. The home must be appraised for an amount more than, or equal to, the purchase price.

Being pre-approved means that your lender is satisfied that you have the funds for the down payment and that you can afford to make each payment on time and in full based on your income and other variablespre-approved-resized.

Why You Should Get Pre-approved

When you are ready to make an offer on a home, both your real estate agent and the seller will want to see the pre-approval letter from your mortgage lender. This indicates that you are, in all likelihood, can complete the purchase and consequently, your offer should be taken seriously. This is especially important in a competitive market where a seller wants to select a buyer who is able to close the deal quickly. On your part, you can avoid disappointment and wasting time by making an offer on a home that is within your affordability range.

Before Pre-approval: Pre-qualifying

Some people may interchange the terms “pre-qualifying” and “pre-approved” but they are not the same thing. Pre-qualifying for a mortgage is the first stage of home buying – it is an informal process whereby a mortgage lender will interview you about your income, credit, and expenses to offer a general idea about the amount you can afford. In this stage, your details are not verified and you are not any closer to securing a loan – it simply helps you know your price range for homes and potential details of your mortgage should you need one to buy a home. How to get pre-approved for a mortgage is the next phase in the process.

How to Get Pre-approved for a Mortgage

How to get pre-approved for a mortgage is quite simple. First, 1) you need to make an appointment with your mortgage lender and then 2) provide all of the necessary documentation for the mortgage lender to review. Some of the documentation you may be asked to provide could include the following:

  • Income stubs
  • Bank account statements
  • Tax returns
  • W-2 forms from the previous years
  • Additional documents showing any other sources of income, such as second jobs, overtime, bonuses and commissions, dividend and interest income, rental income, social security payments, veterans’ and retirement benefits, alimony, and child support.

Your Mortgage Commitment Letter

After the mortgage lender has received your documents and reviewed all of the necessary details, they will let you know if you have been pre-approved, and if so, the maximum amount you are allowed to borrow, your interest rate, and any other terms of your pre-approval. It also indicates that the lender has agreed to close and fund your loan.

These details will be contained in a document known as the mortgage commitment, which will also state that your loan approval is subject to certain conditions. Review these conditions carefully to make sure you can meet these conditions and avoid any glitches during the home offer process.

You need to present your mortgage commitment letter during the home offer process so that the seller knows that you qualify for a loan to complete the purchase.

Note that a mortgage commitment letter is valid only for a limited time, typically between 45 to 60 days. Once it expires, you will have to go through the entire mortgage application process again to receive a new letter.

Home Ownership May Be around the Corner

Home ownership should be an exciting time, and not an upsetting one. Before looking at homes, make sure you get pre-approved. How to get pre-approved for a mortgage simplifies the entire process by letting you know how much you are allowed to borrow so that when the house of your dreams comes along, you can pounce on that opportunity with confidence.


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