Mortgage Pre-Approval: What It Is and How to Get One

In today's competitive housing market, walking into a home showing without mortgage pre-approval is like showing up to a job interview without a resume. According to Zillow's Consumer Housing Trends Report, 85% of sellers prefer to accept offers from pre-approved buyers. That statistic alone should tell you how essential pre-approval has become.

Mortgage pre-approval is more than just a formality—it's your ticket to being taken seriously as a buyer, your budget reality check, and often the difference between winning and losing your dream home in a multiple-offer situation.

What Is Mortgage Pre-Approval?

Mortgage pre-approval is a lender's conditional commitment to provide you with a home loan up to a specific amount. To get pre-approved, you'll submit a formal application along with documentation of your income, assets, and debts. The lender will pull your credit report and verify your financial information.

In return, you receive a pre-approval letter stating:

• The maximum loan amount you qualify for
• The estimated interest rate
• The loan type (conventional, FHA, VA, etc.)
• How long the pre-approval is valid (typically 60-90 days)

This letter becomes your proof to sellers and real estate agents that you're a serious, qualified buyer who can actually close on a purchase.

Pre-Qualification vs. Pre-Approval: What's the Difference?

These terms are often used interchangeably, but they represent very different levels of commitment from a lender.

According to Experian, pre-qualification provides an estimate based on self-reported information, while pre-approval requires verification of your financial claims through documentation and a credit check. Think of pre-qualification as a conversation; pre-approval is a commitment.

Documents You'll Need for Pre-Approval

Gathering your documents before starting the application process can significantly speed things up. Here's what most lenders require:

Income Verification

Asset Verification

Identity and Other Documents

• Government-issued photo ID (driver's license or passport)
• Social Security number or Individual Taxpayer Identification Number
• Proof of current address
• Rental payment history (if applicable)
• Divorce decree (if applicable, for alimony/child support documentation)

Credit Score Requirements by Loan Type

Your credit score significantly impacts both your approval chances and the interest rate you'll receive. Here are the typical minimums:

According to the U.S. Department of Housing and Urban Development, FHA loans are designed to help buyers who might not qualify for conventional financing. | VA | No official minimum* | 0% | Veterans and military | | USDA | 640 | 0% | Rural property buyers |

*VA loans have no official minimum, but most lenders require 620+

Your credit score affects more than just approval—a higher score typically means a lower interest rate, which can save you tens of thousands of dollars over the life of your loan. If your score needs work, consider strategies to improve it before applying.

The Pre-Approval Process: Step by Step

Step 1: Check Your Credit Report

Before applying for pre-approval, review your credit reports from all three bureaus (Equifax, Experian, TransUnion) at AnnualCreditReport.com. Look for:

• Errors that could hurt your score
• Accounts you don't recognize (possible fraud)
• Old negative items that may have fallen off

Dispute any errors before applying for pre-approval.

Step 2: Calculate Your Budget

Determine how much you can realistically afford for:

• Down payment (ideally 20% to avoid mortgage insurance)
• Monthly mortgage payment (generally shouldn't exceed 28% of gross income)
• Closing costs (typically 2-5% of loan amount)
• Moving expenses and initial home costs

Step 3: Gather Your Documents

Collect all the documentation listed above. Having everything ready will speed up the process considerably.

Step 4: Research and Compare Lenders

Don't settle for the first lender you find. Compare:

• Interest rates
• Closing costs and fees
• Customer reviews
• Response time
• Loan options available

Consider getting pre-approved from 2-3 lenders to compare offers. According to the Consumer Financial Protection Bureau, shopping multiple lenders can save you thousands over the life of your loan. When you apply to multiple lenders within a 14-45 day window (depending on scoring model), the credit inquiries typically count as a single inquiry for scoring purposes.

Step 5: Submit Your Applications

Complete applications with your chosen lenders. Be honest and thorough—discrepancies between your application and verification documents can delay or derail your approval.

Step 6: Receive Your Pre-Approval Letters

Some lenders issue letters within hours; others may take up to 10 days. Once you receive your letters, you're ready to make competitive offers on homes.

Benefits of Getting Pre-Approved

1. Shows Sellers You're Serious

In competitive markets, sellers often won't even consider offers without a pre-approval letter. It separates you from casual browsers.

2. Know Your Real Budget

Pre-approval tells you exactly how much you can borrow, preventing the heartbreak of falling in love with a home you can't afford.

3. Faster Closing Process

Much of the paperwork is already done, which can shave days or weeks off your closing timeline.

4. Stronger Negotiating Position

Sellers are more likely to negotiate on price or terms when they're confident you can close the deal.

5. Identifies Problems Early

Better to discover credit issues or documentation problems before you're under contract than during the closing process.

What Pre-Approval Doesn't Guarantee

Understanding the limitations of pre-approval helps set realistic expectations:

Pre-approval is not final approval. Several things must still happen:

• The property must appraise at or above the purchase price
• The home must pass inspection (or issues must be resolved)
• Your financial situation must remain stable
• You must provide any additional documentation requested

Your pre-approval can be revoked if:

• You change jobs or lose income
• You take on new debt
• Your credit score drops significantly
• You can't verify information on your application

When to Get Pre-Approved

The ideal timing depends on your situation:

Pre-approval letters typically expire after 60-90 days. If your home search takes longer, you may need to renew your pre-approval—usually a quick process if your financial situation hasn't changed significantly.

Understanding how mortgage rates work can also help you decide when to lock in your rate during the pre-approval and final approval process.

Conclusion

Mortgage pre-approval isn't just a box to check—it's a strategic advantage in your home buying journey. With 85% of sellers preferring pre-approved buyers, walking into a competitive market without that letter puts you at a significant disadvantage.

Start by checking your credit, gathering your documents, and comparing offers from multiple lenders. The process takes some effort upfront, but it pays off with a smoother home search, stronger offers, and faster closings.

Remember: pre-approval shows you're serious, but protecting that pre-approval until closing is just as important. Keep your finances stable, avoid new debt, and stay in close communication with your lender as you move toward homeownership.