Preparing for pre-approval

What pre-approval means

Pre-qualification is an estimate based on what you tell a loan officer. Pre-approval goes further: the loan officer reviews documentation — income, assets, and credit — and gives you a number you and your agent can act on.

Sellers and listing agents read the two differently. A pre-approval letter from a lender that has actually reviewed your file carries more weight in an offer.

Documents worth gathering early

Recent pay stubs, W-2s or tax returns for the last two years, recent bank statements, and a photo ID cover most situations. Self-employed buyers should expect to provide business tax returns as well.

You don't need everything before a first conversation — your loan officer will tell you exactly what applies to your situation.

What affects your number

Income stability, existing monthly debts, credit history, and available funds for the down payment and closing costs all factor in. Loan programs differ in how they weigh each one, which is why the same buyer can qualify differently across programs.

The first step

Talk to a loan officer licensed in your state before you fall in love with a house. It costs nothing, and it turns your search into a range you can trust.