Eliza Theiss 
This article was updated February 7, 2025
Although not mandatory, securing a mortgage pre-approval has become an essential step for committed homebuyers, especially in tight housing markets. Plus, knowing how to get pre-approved for a mortgage gives serious homebuyers an edge over potential competitors in the market; offers clarity on the buyer’s purchasing power and timeline; and takes into account how long the preapproval for a mortgage lasts.
It also leads to smoother and more predictable transactions and a generally more streamlined homebuying process and signals to lenders and sellers that the borrower is a committed and trustworthy individual.
What Is a Mortgage Preapproval?
Mortgage preapproval is a conditional commitment written from a lender (generally in the form of a letter or document) that establishes how much money the lender is willing to allow the buyer to borrow to finance the purchase of a home. A mortgage preapproval signals that the lender is prepared to extend the line of credit as long as the buyer’s financial position does not change significantly.
During the mortgage pre-approval process, lenders will assess a potential borrower’s income —both amount and sources — as well as your credit score; assets; other loans and lines of credits, including previous loan defaults; child support or alimony payments; employment history; and more.
This way, lenders can determine whether you’re a reliable borrower, what type of loans you qualify for and even what interest rates you can borrow at, thereby providing you with a realistic assessment of your current borrowing power.
Mortgage Pre-Approval vs. Mortgage Pre-Qualification
A common buyer mistake is to assume that if you are pre-qualified for a mortgage, then you don’t need to be pre-approved for a mortgage. However, mortgage pre-approval and mortgage pre-qualification are two distinct steps in the homebuying process.
Most buyers will start the homebuying process by investigating whether they can pre-qualify for a mortgage by providing basic financial information to a mortgage lender. Typically, that includes income, debt and any valuable assets that can be used as collateral.
This process is generally very quick with online mortgage pre-qualification tools and applications returning results within minutes. However, the estimate that you receive during pre-qualification regarding how much you may be able to borrow often doesn’t include a deep credit check. That means that it won’t affect your credit score significantly, but it also won’t return as accurate of a loan amount as the mortgage pre-approval process will.
In short, pre-qualification is quick, informal and does not extend any (strong) commitment from the lender.
Conversely, the process of how to get pre-approved for a mortgage is far stricter: It requires a formal application from the borrower and includes extensive financial documentation. At the same time, the lender will conduct a much more detailed investigation of the borrower, including a hard credit check, which may temporarily affect your credit score.
Mortgage pre-approval is also a longer process lasting at least a few days, although it can be as long as week or more. Even so, the conditional loan approval provides a much more exact credit amount that’s far more reliable and helps sellers consider you as a serious buyer.
Essentially, pre-approval is a formal process that can last up to a week (or more) but extends a conditional loan approval and marks you as a serious buyer with the necessary funds to purchase a home.
How to Get Pre-Approved for a Mortgage
Knowing how to get pre-approved for a mortgage before you decide on a home will streamline your loan approval process and increase your chances of buying your dream home. You can start preparing before you even submit your pre-approval application by thoroughly reviewing your credit score and current loan load.
First, check your credit score by getting credit reports from all three major credit bureaus (Equifax, Experian and TransUnion). If you’re interested in getting pre-approved for a mortgage online, you can secure your credit reports for free online at AnnualCreditReport.com in accordance with federal guidelines.
Then, after you’ve received reports from the three major credit bureaus, review the reports and see what you can change in your financials to increase your score if needed (or possible). Lenders will typically require a score of at least 620, but higher scores increase your chances to get pre-approved for a mortgage, while also increasing the credit amount extended to you by lenders and potentially reducing your loan rate.
What are the main steps to get pre-approved for a mortgage?
There are three main steps to getting successfully pre-approved for a mortgage — gathering all financial documents; determining your budget and debt-to-income ratio; and submitting your pre-approval letter.
1. Compile Your Financials
Your financial status is the primary factor of your potential approval. There are three main areas to gather documentation for — income, assets and debt. Generally, these three areas will cover two of the so-called “3 Cs of mortgage loans” — capacity and credit. For most borrowers, the third C, collateral, will be represented by the home that the borrower is looking to buy, but other high-value assets included in the application may also be considered as collateral.
Income verification: Gather all recent paystubs, W2 forms, tax returns for the last two years, and any other valid revenue streams, such as income from rental properties or trust funds.
Debt information: List and document any current debt you may have, including student loans; other mortgages; car loans; credit card debt; and any mandatory recurring payments, such as alimony or child support.
Proof of assets: Gather bank statements of all accounts, including shared accounts; retirement funds; investments funds; and high-value assets, such as potential rental properties.
2. Determine Your Budget
Determining an accurate budget is key to knowing how to get pre-approved for a mortgage. That’s because not only does it streamline the process, but it also prevents you from getting attached to properties that you can’t afford at the moment.
Many banks and other types of lenders and financial institutions offer free online calculators that can help you estimate what and how much you can afford by estimating monthly mortgage payments, property taxes, insurance payments, maintenance costs, closing costs, and even real estate transfer taxes and utility bill estimates.
While you’re at it, determine your debt-to-income ratio. Most lenders typically look for a debt-to-income ratio of no more than 43% at the highest end. The lower the ratio, the higher your pre-approval and approval chances.
3. Submit Your Pre-Approval Application to Your Chosen Lender
Start by thoroughly researching lenders in your area to determine which offers the best terms and rates for you. You might also consider researching specialized lenders, such as those that focus on rural homes and farms or co-op loans, whereas others only extend typical loans or offer a wide variety of home loans. Also check online reviews and ask acquaintances (especially those who have recently bought a home or refinanced a loan) for personal recommendations.
What items do you need to get pre-approved for a mortgage?
When submitting your application to get pre-approved for a mortgage, make sure to include:
- Bank statements (including retirement and investment accounts)
- Proof of income (such as paystubs, W2 forms, 1099 forms, Social Security, etc.)
- Tax documents
- Employment verification
- Debt documentation (including auto loans, student loans, mortgage statements and credit card statements)
- Valid identification (such as a passport, driver’s license, student ID or social security card)
- Any previous foreclosures or repossessions
- Gift letters if you’re receiving financial help from family to cover the down payment
- Proof of assets (especially important if you’re planning to use something other than the home you want to buy as collateral).
How to Get from Pre-Approval to Final Approval
After choosing a lender, have all financial documents and dossiers compiled beforehand and then carefully complete and submit your loan pre-approval application. Then, when you receive a loan pre-approval, closely review the conditional loan offer for the loan amount, terms, and rates, as well as any potential fees and the expiration date. (Most loan pre-approval documents are valid for 60 to 90 days, depending on the lender.)
Note that from the moment you receive your official pre-approval to the time you make an offer on a home and apply for final approval, it’s crucial that you maintain financial stability and avoid any major changes, such as changing jobs, purchasing high-value items, defaulting on other loans and more.
Finally, the most crucial aspect during this time is to make all payments (be they payments on other loans or utility bills) on time and in full and not take on any new loans or financial responsibilities. For any unexpected surprises, it’s also essential to keep an eye on your credit score.
FAQ
How far in advance should I get pre-approved for a mortgage?
Generally, it’s recommended to get pre-approved for a mortgage one to four months before applying for final approval and making a purchase. Keep in mind, though, that most mortgage pre-approval letters are valid 60 to 90 days, so you may have to reapply for pre-approval.
How to get pre-approved for a mortgage?
The three main steps to get pre-approved for a mortgage are:
- Take stock of and compile your financials.
- Determine your budget and loan-to-debt ratio.
- Submit your official mortgage pre-approval application.
Can you get too many mortgage pre-approvals?
Technically, there’s no limit to how many pre-approvals you can secure or from how many lenders. In fact, it’s highly recommended to shop around with different lenders to see which can offer you the most advantageous rates and conditions. This allows you to keep your options open and increases your negotiating power with lenders. However, remember that the mortgage pre-approval process can also affect your credit score and temporarily lower it.
Can your mortgage application be denied after getting pre-approval?
Yes, your mortgage application can be denied after getting pre-approval because pre-approval is a conditional commitment, not a final contract. More precisely, any changes in your employment or financial health can affect the outcome of your final approval, as can large purchases, new loans or loan defaults.
Per the latest data from the Consumer Financial Protection Bureau, 9.1% of all mortgage applications are denied with varying rates across different loan types. Conventional conforming home loans had the lowest denial rate at 7.6%, while non-conventional FHA loans had the highest rate at 14.4%.
How much does it cost to get pre-approved for a mortgage?
Many lenders offer mortgage pre-approval services free of charge, but some do charge an application fee. In this case, the application fee must be paid ahead of time and is required to be paid regardless of approval or denial. Application fees will generally start around $300 and can go as over $400.
Can you increase your loan pre-approval amount?
Yes, you can increase your loan pre-approval amount by adding a co-borrower or co-signer; increasing your down payment (up to 20% or more); paying off existing debt; extending the loan period; raising your credit score; increasing your income; changing the loan type you’re applying for; or reapplying at a better time, such as after you’ve paid off other loans and the loan satisfaction has been included in your credit report.
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