How to Get Pre-Approved for a Mortgage

Mortgage pre-approval isn’t required during the home buying process, but it can be beneficial. Having a mortgage pre-approval letter indicates to buyers that any offer you make is serious, and that you will be able to secure financing, which could make them more willing to negotiate or accept your offer. It also gives you a more defined budget to refer to when you’re shopping for homes.

Learn more about the difference between mortgage prequalification and pre-approval.

To get pre-approved for a home loan, you are essentially partially completing your mortgage application, absent the information about the property you’re interested in purchasing. This means that when you do put an offer in on a home, part of the final mortgage application work has already been completed, which could save you time in the long run.

You’ll need many of the same documents for mortgage pre-approval that you would need if you were filling out the full application. This includes, but is not limited to:

• Employment information for the last two years (name, address, and phone numbers), W-2 statements, and pay stubs from the last two months
• Proof of any other current income source, such as:
  • Child support/alimony: Separation Agreement and Court printout or 12 months cancelled checks, If you wish to have it considered as part of your income
  • Awards letter for Social Security and 1099 for disability income
  • Rental Income – Copy of lease, if property has been held for less than 12 months; 2 years of tax returns with all schedules, if property has been held longer than 12 months

If self-employed

• Signed, completed federal income tax returns for the past two years, including personal, partnership, and corporate returns
• Year-to-date business profit-and-loss statement for current year, if more than three months have passed since the end of the last tax year

Source of funds/down payment

• List of checking and saving accounts, including bank name, account number, and type
• Original bank statements for the last two months, including savings, checking, and investment accounts
• Stocks and securities account statements for the last two months
• Sale of asset: proof of ownership, proof of sale, and proof of funds transfer
• For gift funds: a gift letter, evidence of transfer, and sometimes evidence of withdrawal

Payment history

• List of all debts presently owed
• Cancelled rent or mortgage payment checks for the past 12 months, if not reflected on credit report
• Child support/alimony

• Full name and Social Security Number
• Driver’s license or state-issued identification card (unexpired)
• Home address for the last two years, including dates

As part of the pre-approval process, your lender will also check your credit history. This can be useful, since it will flag any concerns with your credit that may need to be fixed early in the home buying process.

If you are pre-approved, you will receive a formal mortgage pre-approval letter, detailing the amount you are pre-approved for, as well as an interest rate. You can use this letter to demonstrate the ability to finance a home to a seller. It is only valid for 120 days, however, so if you do not make an offer on a home in that time you will need to get in touch with your lender to issue a new letter. A mortgage pre-approval, while valuable, is not a full guarantee, as information about the property may affect your final application approval.

Find a Mortgage Development Officer today or speak to a Mortgage Specialist at 855-684-4968.