The Pre-Approval Process: Why It Matters and How to Get Started

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Buying a home is one of the biggest financial decisions you’ll ever make, and the journey often starts before you even set foot in an open house. One of the smartest first steps you can take is getting pre-approved for a mortgage. Pre-approval gives you a clear picture of your budget, shows sellers you’re a serious buyer and helps your REALTOR® guide you toward the right homes.

What Is Mortgage Pre-Approval?

Pre-approval is a lender’s written estimate of how much they’re willing to loan you for a home purchase. To get it, you’ll provide financial documents so the lender can verify your income, credit, debt and savings. This offers a more detailed view than pre-qualification, which is typically based solely on self-reported information.

With a pre-approval letter in hand, you’ll know your price range, potential interest rate and loan options. Many sellers require pre-approval before accepting an offer, so it’s a powerful tool in a competitive market.

Why Pre-Approval Matters

  • It Sets Your Budget: You’ll know exactly how much home you can afford and avoid falling in love with properties out of reach.

  • It Strengthens Your Offer: Sellers are more likely to take you seriously and accept your offer if they know financing is lined up.

  • It Saves Time: You and your REALTOR® can focus on homes that match your price range.

  • It Identifies Issues Early: If there are problems with your credit or debt-to-income ratio, you’ll find out before you’re under contract, giving you time to address them.

What You’ll Need for Pre-Approval

Every lender may ask for slightly different information, but generally you’ll need:

  • Recent pay stubs and proof of employment

  • W-2s and/or tax returns from the past two years

  • Bank and investment account statements

  • Records of debts like car loans, student loans or credit cards

  • Identification (driver’s license, Social Security number)

The lender will also run a credit check to see your credit score and history.

How to Get Started

  1. Check Your Credit: Review your credit report for errors and know your score. The higher your score, the better your loan options.

  2. Gather Documents: Organize the financial paperwork listed above so it’s ready to share.

  3. Shop Around: Talk to multiple lenders, like banks, credit unions and mortgage brokers, to compare rates and fees.

  4. Apply for Pre-Approval: Once you choose a lender, submit your application and documents. If approved, you’ll receive a pre-approval letter, usually valid for 60–90 days.

  5. Work With Your REALTOR®: Share your pre-approval with your REALTOR® so they can help you find homes in your range and negotiate confidently.

Getting pre-approved sets you up for success. It helps you shop smarter, negotiate stronger and move faster when you find the home you love. With your pre-approval in hand, as well as the guidance of a trusted REALTOR®, you’ll be ready to turn your homeownership goals into reality.