What is mortgage pre-approval, and why is it important?

The home buying process can take some time, but if you get loan pre-approval it can really speed up the process. In a seller's market it really pays to be pre-approved if you're not a lot of seller's won't take your offer seriously. You may have a few questions, and hopefully this blog post will answer some of those.

What is a mortgage pre-approval?

A pre-approval does not guarantee that you will get approved for your loan. It just means a financial officer has looked over your finances, assets,and credit history. This is able to determine how much money you can afford to borrow.

Why is getting pre-approved important?

Getting pre-approved is important because it saves you and your agent time. If you don't get pre-approved, it could deter realtors from wanting to work with you. They don't want to be showing you homes outside of your price range. It also makes your offers more credible, which makes your offer stronger.

How do I get pre-approved?

To get pre-approved you need quite a bit of documentation. Here's what you'll need:


1. Driver’s license or U.S. passport.

2. Social Security card or number.

3. If you aren’t a U.S. citizen, a copy of the front and back of your green card(s).

4. Credit history. Your lender will want to check your credit score.

5. Employment verification. Your lender wants to know you have stable employment and income. They will more than likely call your current employer and ask about your employment and yearly salary.


1. Recent pay stubs going back to 30 days.

2. W-2 forms from the last two years.

3. Proof of any additional income.

4. Last two years of personal federal income tax returns with all pages and schedules.

5. Last two years of business federal income tax returns with all pages and schedules.


1. Bank statements that prove you have enough to cover the down payment and closing costs.

2. If someone is helping you with the down payment, you will need a gift letter stating that the fund is a gift and not an IOU.

3. Last quarterly statements for asset accounts, including your 401(k), IRA, stock accounts, and mutual funds

How long does the pre-approval process take?

The pre-approval process shouldn't take long! As long as you have all the documents that were listed above it should be a same day deal. Bad credit can slow the process down. You also shouldn't try to hide anything because your lender will eventually find out, and that could be bad.

All in all, the mortgage pre-approval process isn't painful or time consuming. Being pre-approved makes your offer more credible and a lot stronger. Being pre-approved can help you to be more competitve, and really speed up the home buying process.

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