Look, I have to keep it 100 about mortgage preapproval. I've been working in this industry since I was 18, and I still remember my first borrower asking me why they needed to bring what felt like their entire life history just to get preapproved. Here's why: getting mortgage preapproval from a lender isn't some formality, it's your ticket to being taken seriously in today's housing market.
Think of a preapproval as your financial background check. The Consumer Financial Protection Bureau (CFPB) emphasizes that preapproval involves verifying your financial information through thorough documentation review and credit checks. Without proper documentation, your application won't move forward, period.
When you get mortgage preapproval, you're getting more than a pat on the back from a lender. You're getting a conditional commitment that says "we've looked at your finances, and yes, we're willing to lend you up to this specific amount." Many sellers won't even consider offers from buyers without preapproval these days, especially in markets where multiple offers are common.
Let me clarify something that confuses a lot of people. Mortgage preapproval is different from prequalification. With prequalification, you're basically having a conversation with a lender where you tell them about your finances and they give you a rough estimate. It's informal, quick, and doesn't involve verifying anything.
Preapproval? That's the real thing. The lender pulls your credit, verifies your employment, reviews your bank statements, and actually underwrites your application. At AmeriSave Mortgage, we look at every aspect of your financial picture to determine not just how much you can borrow, but how much you can comfortably afford.
Mortgage rates declined through 2025 after starting the year above 7%. According to the Federal Reserve's H.15 Selected Interest Rates, 30-year fixed mortgage rates were in the low-6% range as of November 2025. With rates like these, getting preapproved becomes even more important because it helps you move quickly when you find the right property.
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Your lender needs to verify you are who you say you are. Identity theft is a real problem in mortgage lending. You'll need a current, valid driver's license, state-issued ID card, passport, or permanent resident card.
Make sure your ID isn't expired. I've had to delay preapprovals because someone showed up with an ID that expired three months ago. Also, if you've recently moved and your address on your ID doesn't match your current residence, bring something that shows your current address like a utility bill.
Your Social Security number links all your financial information together. The lender uses it to pull your credit report, verify your employment history with the Social Security Administration, and confirm your identity matches across all your documentation.
If you've misplaced your Social Security card (happens more than you'd think), you can order a replacement through the Social Security Administration website. Just don't wait until the last minute, because it can take a couple weeks to arrive.
Lenders want proof of current employment and consistent income. You'll typically need pay stubs covering the most recent 30 days, though some lenders ask for 60 days worth.
If you get paid through direct deposit, your employer should have electronic copies available. Make sure the pay stubs clearly show your year-to-date earnings, not just your most recent paycheck. Lenders use this information to calculate your qualifying income.
Here's something people miss: if you have income from overtime, bonuses, or commissions, you'll generally need a two-year history of receiving that income for lenders to count it toward your qualification. One bonus check doesn't cut it.
Your checking and savings account statements serve two purposes. First, they verify the income deposits on your pay stubs actually hit your account. Second, they prove you have enough cash reserves to cover your down payment and closing costs.
Lenders typically require statements for all accounts where you hold funds. That includes checking, savings, money market accounts, and even accounts at different banks. If you're planning to use gift money from family for your down payment, those funds need to be documented with a gift letter.
The CFPB recommends maintaining at least two months of reserves after closing to show financial stability. Some loan programs actually require this.
Tax returns paint a complete picture of your income over time. W-2 employees need to provide their 1040 forms with all schedules for the past two years, along with W-2s from each employer.
Here's where it gets tricky for some borrowers. If there's a significant discrepancy between your tax returns and current income (say, you got a big promotion), you'll need to explain that. Lenders want to see stable or increasing income, not declining earnings.
Can't find your tax returns? You can request free tax transcripts from the IRS website, usually available within 5-10 business days.
Even though your W-2 information appears on your tax returns, lenders want to see the actual W-2 forms. Why? Because they verify the information matches exactly and confirm the employer identification numbers.
If you worked for multiple employers during the year, you need W-2s from each one. Lenders add up all your W-2 income to calculate your total earnings. Missing even one W-2 can delay your preapproval.
Your 401(k), IRA, stocks, bonds, and mutual funds all count as assets that strengthen your application. You'll need statements for the most recent two months showing account numbers, current balances, and recent activity.
One thing that surprises borrowers: you can actually use retirement funds for a down payment in some cases, especially for first-time home buyers. However, there are tax implications and early withdrawal penalties to consider. The lender will need documentation showing how much you can access and any penalties you'd incur.
According to Fannie Mae's Selling Guide, conventional loans underwritten through automated systems can approve debt-to-income ratios up to 50% when borrowers have strong credit scores and significant reserves in investment accounts.
This is where your debt-to-income ratio comes into play, and honestly, it's where I see a lot of preapprovals fall apart. Your DTI compares your monthly debt payments to your gross monthly income.
You need to list every recurring debt: rent or current mortgage, car loans, student loans, credit card minimum payments, personal loans, child support, alimony. Don't try to hide anything, because lenders pull your credit report and they'll see it all anyway.
Here's the math: if you earn $6,000 per month before taxes and your total monthly debts (including the proposed mortgage payment) equal $2,580, your DTI is 43%. That's right at the limit for many loan programs.
If you currently rent, lenders want proof you've paid your rent on time. This usually means providing 12-24 months of canceled checks, bank statements showing rent payments, or a verification of rent form completed by your landlord.
Your landlord's contact information needs to be current and verifiable. If you've moved recently, you might need contact info for previous landlords too. Consistent on-time rent payments strengthen your application, while late payments raise red flags.
Planning to use gift money from family for your down payment? You'll need a gift letter stating the funds don't need to be repaid. Different loan programs have different rules about who can give you gift funds.
The gift letter must include the donor's name and relationship to you, the dollar amount, the property address, a statement that the funds are a gift with no repayment expectation, and signatures from both donor and recipient. Plus, you'll need to document the transfer of funds into your account.
Conventional loans typically limit gifts to family members, while FHA loans allow gifts from employers, labor unions, and close friends with demonstrated relationships.
Your lender will pull your credit report directly from the three major credit bureaus (Equifax, Experian, and TransUnion), but you need to authorize them to do so. This creates a hard inquiry on your credit, which can temporarily lower your score by a few points.
The good news? If you're rate shopping with multiple lenders within a 14-45 day window, those inquiries typically count as a single inquiry. The CFPB recommends getting preapproved from 3-4 lenders to compare offers.
Check your credit yourself before applying. You're entitled to free reports from each bureau annually at AnnualCreditReport.com. Fix any errors before the lender pulls your report.
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Already own a home and buying another property? Whether it's an investment property, vacation home, or you're relocating, you'll need recent mortgage statements from your current loan.
These statements show your remaining principal balance, monthly payment amount, and payment history. If you're planning to rent out your current home, you'll also need a lease agreement or rental analysis showing the expected income.
Lenders want to see you can afford multiple mortgage payments. They'll calculate your DTI including all property debt, so if you're carrying significant mortgage debt already, it might limit how much you can borrow for the new property.
Self-employed borrowers, independent contractors, and business owners face extra scrutiny. You'll need personal and business tax returns for the past two years, including all schedules and forms.
Your Schedule C, K-1, or corporate returns show your actual business income after expenses. Here's the catch: if you've been writing off significant business expenses to lower your taxable income, those deductions reduce your qualifying income for the mortgage.
In addition to tax returns, self-employed borrowers need a profit and loss statement for the current year-to-date. This document shows your business income and expenses for the current year and helps lenders determine if your income is stable or changing.
The P&L should be prepared by a CPA or tax professional using standard accounting practices. It needs to match the format of your tax returns and show monthly breakdowns. Lenders compare your current year income to previous years to identify trends.
Certain loan programs require extra documentation. VA loans, available to veterans and active military, require proof of military service. Active duty members need a Statement of Service on official letterhead. Veterans need their DD Form 214 showing discharge status.
USDA loans for rural properties have income limits and require verification that the property location qualifies for the program.
The Federal Housing Finance Agency regulates Fannie Mae and Freddie Mac, which together provide over $8.5 trillion in funding for U.S. mortgage markets. Understanding which loan program fits your situation determines which additional documents you'll need.
Your DTI ratio is arguably the most important number in your preapproval. For manually underwritten conventional loans, Fannie Mae's guidelines set the maximum total DTI at 36%, though this can go up to 45% if you meet specific credit score and reserve requirements. For automated underwriting, the maximum is 50%.
FHA loans follow slightly different rules. The standard limits are 31% for housing expenses (front-end ratio) and 43% for total debt (back-end ratio), but FHA allows higher ratios with compensating factors like high credit scores or significant cash reserves.
Let me break down a real example. Say you earn $7,000 per month gross income. Your proposed mortgage payment (including principal, interest, taxes, insurance, and PMI) would be $1,750. You also have a $400 car payment, $200 in student loans, and $150 in minimum credit card payments.
Total monthly debts: $1,750 + $400 + $200 + $150 = $2,500 DTI calculation: $2,500 / $7,000 = 35.7%
That 35.7% DTI puts you in a comfortable range for most loan programs. But if your debts totaled $3,150, your DTI would jump to 45%, requiring stronger compensating factors.
Your credit score affects both your approval odds and your interest rate. Different loan types have different minimum score requirements:
According to the Federal Reserve Bank of New York's data, super-prime borrowers with credit scores of 720 or higher received the majority of new mortgage originations in recent quarters.
Want to get preapproved quickly? This is what really works.
Before you even call a lender, make a folder with all your paperwork. I'm talking about all of your pay stubs, bank statements, tax returns, and everything else. When your lender asks for papers, you can send them right away instead of rushing around.
Get your credit reports before you apply and challenge any mistakes. You might not think it, but mistakes happen a lot. A borrower of mine had a credit report that showed a late account that wasn't theirs. It took 30 days to get rid of, but it raised their score by 40 points.
Once you start the preapproval process, don't make any big changes to your finances. Don't buy a car, get new credit cards, or make big purchases with credit. Each new debt you take on changes your DTI and could make you ineligible.
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Things you should not do when getting preapproved
I've seen almost every mistake there is in this business after working in it for years. These are the main ones.
The letter you get saying you're preapproved should say how much money you can borrow, what the interest rate will be, what kind of loan program it is (conventional, FHA, VA, etc.), and when it will end. Some letters also talk about things like needing an appraisal or proof of homeowners insurance.
Give this letter to your real estate agent so they know how much you can spend. They will use it to narrow down the properties and show sellers that you are a qualified buyer.
Your offer is stronger when you find a home you love and have a preapproval letter. It shows sellers that you can afford it and are serious about buying. Preapproval can make the difference between your offer being accepted or turned down when there are multiple offers.
Your lender will check your credit again right before you close. Your loan could be turned down days before closing if you've opened new credit accounts, made big purchases, or missed payments.
Once you've been preapproved, don't do any of the following: open new credit cards, buy a car or other expensive things on credit, make large cash deposits without proof, change jobs unless you have to, or co-sign loans for anyone.
You'll need to update your paperwork if your preapproval runs out before you find a house. That means giving them your most recent pay stubs, bank statements, and maybe even new credit reports.
We've made the preapproval process at AmeriSave Mortgage as easy as possible. It takes about 15 minutes to fill out our online application, and you can safely upload documents through our portal.
We help people who are buying their first home, have owned a home before, are self-employed, and everyone in between. We can help you get through the preapproval process, whether you're looking at conventional loans with as little as 3% down, FHA loans for first-time buyers, VA loans for veterans, or USDA loans for rural properties.
The time frame changes depending on how quickly you send in the paperwork and how complicated your finances are. If you are a W-2 employee with simple finances and send in all the paperwork up front, you can get preapproved in 24 to 48 hours. People who are self-employed or have complicated sources of income usually need 3 to 5 business days. It could take one or two weeks if you're missing papers or the lender needs more information. The most common reasons for delays are applications that aren't finished, missing paperwork, or income sources that aren't clear. To speed things up, make sure all your paperwork is in order before you apply, respond right away to any requests from lenders, check your credit ahead of time and fix any mistakes, and don't start the process during busy home buying seasons when lenders are busy. One thing I've learned from my years in the business is that you shouldn't wait until you find a house you love to start the preapproval process. Before you start looking for a house, get preapproved.
Yes, for sure. Student loans don't automatically disqualify you, but lenders do take them into account when figuring out your debt-to-income ratio. They use the amount you actually pay each month, which is shown on your credit report, if you are currently paying off your debt. If you're in deferment or forbearance, they figure out your payment based on your loan balance. This is usually 0.5% to 1% of the total balance each month, depending on the type of loan. Different lenders and loan types have different requirements for income-driven repayment plans that show a zero dollar payment. The most important thing is to keep your total DTI below the program's limits. If your student loan payments are too much for you to handle, you could try paying off other debts first, getting a raise or doing side work to make more money, looking into first-time buyer programs that allow for higher DTI, or extending the term of your mortgage to lower the monthly payment.
Different types of loans have very different credit score requirements. You usually need a score of at least 620 for a conventional loan backed by Fannie Mae or Freddie Mac. Some lenders, though, require a score of 640 or 660. FHA loans are more flexible because some lenders will accept scores as low as 500–579 with a 10% down payment. Others will accept scores as low as 580 with a 3.5% down payment. There is no official minimum credit score for VA loans, but most lenders require a score between 620 and 640. Most of the time, USDA loans need at least 640. Your credit score not only affects whether you get preapproved, but it also has a big effect on your interest rate. People with scores above 760 get the best rates, while people with scores between 620 and 679 pay much higher rates. If your score isn't where you want it to be, you might want to spend six months to a year working on it before you apply. If you see any mistakes on your credit report, dispute them. Keep your credit card balances below 30% of their limits, make all of your payments on time, don't open any new credit accounts, and keep your old ones open even if you don't use them.
To get preapproved, you need to do a hard credit check, which usually lowers your score by 3 to 5 points for a short time. The good news is that this effect is small and short-lived, and your score usually goes back up in a few months. Credit scoring models know that people shop for mortgages, so they have built-in protections. If you apply with more than one lender within 14 to 45 days, all of those applications will be counted as one for scoring purposes. This lets you compare rates without hurting your credit. The credit inquiry makes up about 10% of your credit score. Its effect gets weaker over time and goes away completely after two years. Lenders can only see inquiries on your report for up to two years. Don't let the fear of a credit check stop you from getting preapproved if you really want to buy. The 3–5 point temporary drop is worth it because preapproval gives you an edge over your competitors.
Your loan approval may be affected by changes in your financial situation during the preapproval period. You must tell your lender about any major changes. Some changes can make things better, not all of them are bad. A raise or promotion, paying off debt that lowers your DTI, getting gift money for your down payment, and saving more money are all good changes that could help. Some things that could hurt your approval are losing your job or having your hours cut, taking on new debt like car loans or credit cards, making big deposits or withdrawals without proof, missing payments on any accounts, and going from W-2 employment to self-employment. Before closing, lenders check your employment and pull your credit again, so they will find out about any changes anyway. If you lose your job, call your lender right away. Sometimes the closing can be put off until you get a new job.
Self-employed people can definitely get preapproved, but they have to fill out more paperwork. In addition to the usual documents that all borrowers need, self-employed applicants must also send in their personal and business tax returns for the past two years, along with all schedules, K-1 forms if they have partnerships or S-corp ownership, a year-to-date profit and loss statement from a CPA, business bank statements from the last two to three months, and business licenses. This is where self-employed borrowers often have trouble: lenders look at your net income after business expenses, not your gross revenue. If you've been writing off big expenses to lower your taxes, those deductions lower your qualifying income. Lenders also usually look at your income over the past two years. If your income went down from year one to year two, they will use the lower average. We work with self-employed borrowers all the time at AmeriSave, and we'll help you show your finances in the best light possible.
Getting preapproval doesn't mean you have been approved for a loan. The lender will order an appraisal, go over the purchase contract, and check all of your information again right before closing. The home may not be worth as much as you paid for it, there may be problems during the inspection, or your finances may change. Any of these could affect the final approval. Getting preapproved is a good sign that you'll qualify, but you have to keep your finances in order and find a property that meets the program's rules.
Yes, you should get preapproved by more than one lender. Different lenders have very different rates, fees, and loan terms. One lender might offer a certain rate with certain fees, while another lender might offer a different rate with different fees. You wouldn't know which loan is actually cheaper over time if you didn't compare them. Within 14 to 45 days, apply to all of the lenders you want to work with. Credit scoring models see more than one mortgage inquiry in this time period as one inquiry. When you compare preapprovals, don't just look at the interest rate. Look at the APR, which includes fees and shows you how much it really costs to borrow money. Look at the lender's fees, discount points, estimated closing costs, and loan terms.
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