How to Obtain a Mortgage Pre-approval
The home buying game is cutthroat enough, so to get the best deal you can get, you’ll want every advantage possible.
Something you may not have considered is a home loan pre-approval. Maybe you’ve never heard of a pre-approval, or maybe you stopped after getting a mortgage pre-qualification.
Either way, a pre-approval is a must have for anyone serious about buying a home. Let’s take a closer look at what they are and how to secure one.
What is a mortgage pre-approval?
A home loan pre-approval is the next step after a mortgage pre-qualification.
When you apply for pre-qualification, it initiates a review of your debt, assets, and income. Then you receive an estimate of how large of a loan you may qualify for is generated based off that information.
A mortgage pre-qualification is usually free and can be done online. There are plenty of resources that can help you decide where to get a mortgage pre-qualification and the questions you should ask your lender. If you’re serious about buying, though, you’ll go one step further and get a mortgage pre-approval.
Pre-approval is the addition of a full look at your credit, as well as verification of your supporting documentation. You’ll fill out a mortgage application, and instead of being given an estimate of loans you may qualify for, you are given documentation of how large of a loan you are able to be approved for based on your desired monthly housing payment.
RELATED: “How much House can I afford?“
The difference between qualifying for a loan and being approved for a loan is vital here. With a pre-approval, you will have documentation to show homeowners during the negotiation stage. This will show them that you are serious about buying, as well as financially able to follow-through.
How to obtain a mortgage pre-approval
So how do you go about securing a home loan pre-approval? It’s not hard to do, but it does require some forethought and patience.
Depending on your situation, it may take some time to get your pre-approval, so it’s a good idea to start the process early. Don’t try to get a pre-approval after you’ve already picked a house you desperately want because if you hit any delays along the way, you’ll miss out on the sale.
When you set out on your quest for a mortgage pre-approval, follow these steps.
How to Obtain a Mortgage Pre-approval – Step 1:
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Get a mortgage pre-qualification
Pre-qualifications are not required for a pre-approval, but they are a good first step.
Shop around online and apply for a pre-qualification. It doesn’t take much time and is usually free. Be sure to double-check that the site you’re on is valid before you give them any of your information.
You should be able to complete the entire process online, but if you’d prefer, you can always visit someone in person.
How to Obtain a Mortgage Pre-approval – Step 2:
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Gather the proper documents
Most of the work involved in getting a pre-approval is organizing all the proper documents. You’ll save yourself a lot of time and hassle if you get your papers together ahead of time. At minimum you will need the following:
- Current Address and employment details
- Social Security number
- Credit score and credit report (Get your free credit report)
- The Mortgage Loan Originator will pull your credit report, but it’s good to know beforehand what’s on your report to make sure it’s accurate.
- Calculated debt to income ratio (Unsure? Start here: “What is a debt-to-income ratio?”)
Remember that if you have a co-borrower involved that you’ll need to bring all of their information, as well. Don’t be alarmed! During this initial information-gathering process, problems may arise with your credit or debt. This is where pre-planning comes in handy. If you start the process a few months before you plan to be serious about buying a home, then you’ll have time to correct errors on your credit report, pay off debts to lower your debt to income ratio and improve your credit.
How to Obtain a Mortgage Pre-approval – Step 3:
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Find a lender
Feel free to shop around a bit as you look for a lender. Local lenders may be more likely to give you a good deal as community relations are more important for them than they are for larger businesses.
Also good to keep in mind – feel free to go to a different lender if you feel you’re not getting a good deal with your first pick. You’re under no obligation to follow through with a loan just because you’ve inquired about a mortgage pre-approval.
How to Obtain a Mortgage Pre-approval – Step 4:
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Fill out a mortgage application
Once you’re actually starting the official pre-approval process, you’ll be asked to fill out a mortgage application.
Since you likely won’t have a property in mind yet, you can leave some information on the application blank. Although we don’t charge our clients an application fee, some lenders do charge a fee associated with the application.
How to Obtain a Mortgage Pre-approval – Step 5:
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Happy hunting
Go find that perfect home!
Having a mortgage pre-approval will put you miles ahead of a lot of the competition and sellers will take you more seriously.
You’ll likely have more bargaining room, as well. However, remember that a pre-approval does not last forever. They become invalid after several months, so while it is important to get one early, be sure you don’t get one so early that you have to renew it before you’ve even found a house to make an offer on.
About the Author: 
Christine Yaged is a co-founding partner and Chief Product Officer of FinanceBuzz. Christine launches and scales brands. She is passionate about technology, digital marketing, and people.
Disclaimer: This article, How to Obtain a Mortgage Pre-approval – The Step by Step Guide was written by Christine Yaged in her personal capacity. The views and opinions expressed in this article are the author’s own and do not necessarily reflect the views of MLS Mortgage Group.