How to get pre-approved for your home loan

Getting pre-approved for a home loan is a crucial step in the home-buying process. It basically means that a bank or mortgage lender has looked at your financial situation and is willing to lend you a certain amount of money to buy a home. Here’s what you’ll typically need to do to get pre-approved:

  1. Check Your Credit Score: Your credit score is like your financial report card. Lenders will want to see it to determine how creditworthy you are. The higher your score, the better your chances of getting pre-approved. Make sure your credit report is accurate and up-to-date.
  2. Gather Financial Documents: You’ll need to provide some paperwork to the lender. This includes things like pay stubs, W-2s or tax returns, and bank statements. Basically, they want to see your income, expenses, and how much money you have saved up.
  3. Calculate Your Debt-to-Income Ratio: Lenders will look at how much debt you have compared to your income to make sure you can handle the mortgage payments. This is called the debt-to-income ratio. To calculate this, add together all of your expenses and divide that total by your gross monthly income. Generally speaking, you’ll want to have a ratio under 43%.
  4. Choose a Lender: You can approach banks, credit unions, or mortgage brokers to get pre-approved. Shop around to find the best deal, because different lenders may offer different interest rates and terms.
  5. Fill Out an Application: Are you ready to seriously house hunt? The lender will give you a mortgage application form to fill out. It will ask about your income, expenses, and other financial details. Be honest and thorough when filling it out.
  6. Get a Pre-Approval Letter: If you’re approved, the lender will give you a pre-approval letter. This letter states how much money they’re willing to lend you. It’s a crucial document when you start house hunting because it shows sellers that you’re serious and capable of buying their property. Be sure to check with your lender to see how long the pre-approval is valid.
  7. Be Ready to Act: Once you have that pre-approval letter, you can confidently start looking for homes in your price range. Just remember that the pre-approval isn’t a guarantee of a loan. The final approval comes after you’ve found a specific home and the lender does a more thorough check.

Getting pre-approved is a significant step in your home buying process as it helps you understand how much home you can afford and makes you a more attractive buyer to sellers.  Need lender recommendations?  Reach out – we work with some great lenders and are happy to pass along their information.


Lauren & Cambron | Lauren Zurilla & Associates