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Getting Pre-approved for a Mortgage

What is prequalification for a mortgage?

A prequalification letter is your lender’s opinion of the maximum amount for which you may qualify (or can afford) in purchasing a home. Prequalification can be completed fairly quickly because it requires less information than mortgage pre-approval. Even after prequalification, you will need approval for a mortgage. Pre-approval is the step between prequalification and approval that can give you an edge when buying a home.

Benefits to getting pre-approval for a mortgage, include:

  • Knowing exactly how much you can afford
  • Giving you a competitive edge over buyers who are not pre-approved
    and speeding a seller’s ability to accept your offer
  • Reducing the time your lender needs to fund your loan

To get mortgage pre-approval and approval, you must provide documents
the lender will verify, including proof of your:

  • Employment
  • Income
  • Overall debt and monthly debt payments relative to your income (debt-to-income ratio)
  • Available cash or savings
  • Total assets, including other properties you own
  • Credit rating