What is Mortgage Pre-Approval?
Mortgage pre-approval is a lender's conditional commitment to lend you a specific amount based on a review of your financial information. Unlike pre-qualification, pre-approval involves a thorough analysis of your creditworthiness.
Why Pre-Approval Matters
- Know Your Budget: Understand exactly how much home you can afford
- Strengthen Your Offer: Sellers take pre-approved buyers more seriously
- Faster Closing: Much of the paperwork is already done
- Identify Issues Early: Address any credit problems before you find a home
Documents You'll Need
Gather these documents before applying:
- W-2s from the past two years
- Recent pay stubs (30 days)
- Tax returns (2 years for self-employed)
- Bank statements (2-3 months)
- Investment account statements
- Photo ID
- Social Security number
The Pre-Approval Process
- Complete a mortgage application
- Provide required documentation
- Lender pulls your credit report
- Underwriter reviews your file
- Receive your pre-approval letter
Pre-Approval vs. Pre-Qualification
| Pre-Qualification | Pre-Approval |
|---|---|
| Self-reported financial info | Verified documentation |
| Estimate only | Conditional commitment |
| Quick process | More thorough review |
| No credit pull (usually) | Hard credit inquiry |
How Long Does Pre-Approval Last?
Pre-approval letters typically expire after 60-90 days. If your letter expires before you find a home, you can request an updated letter (you may need to provide updated documentation).