How to Get Preapproved for a Mortgage: Step-by-Step

If you’re considering buying a home in the near future, preapproval is a smart and often necessary move when getting started. It sets a clear budget, strengthens offers, and helps avoid surprises during the underwriting process. While the steps may feel a bit technical at first, mortgage preapproval is a straightforward process once you know what lenders are looking for. 

This guide walks you through everything from understanding how preapproval works to gathering documents, applying with a lender, and using your preapproval letter in the homebuying process.

What is mortgage preapproval?

Mortgage preapproval is a document from a lender that demonstrates that a borrower is eligible for a certain loan amount based on their financial history. During preapproval, the lender reviews income, employment history, credit profile, debts, and assets to evaluate the buyers’ eligibility. This process helps define a realistic homebuying budget and proves to sellers that a buyer is financially prepared to take on purchasing a home. 

While the letter is a tentative statement of what a buyer may be eligible for and still depends on final underwriting, it does provide meaningful leverage when working with a real estate agent and making an offer. Agents use preapproval letters to guide price ranges and negotiations, and sellers unquestionably view preapproved buyers as more credible and ready to move forward.

Steps on how to get preapproved for a mortgage

Getting preapproved is a fairly simple process, once you know what to look out for. Below is a step-by-step guide on what to expect:

Step 1: Understand the mortgage preapproval process

The preapproval process starts with a thorough review of your finances. The lender will closely examine your income, debts, assets, and overall credit history to determine your ability to repay a mortgage. This review helps to evaluate the maximum loan amount you’re eligible for, in addition to the types of mortgage programs available.

Generally, preapproval letters are good for 60 to 90 days. You might need a new credit check or updated documents if your home search goes beyond that timeframe. 

Step 2: Decide if mortgage preapproval is the right move

Mortgage preapproval is especially important for buyers who want clarity, credibility, and a competitive edge in the market. It strengthens offers by showing sellers that financing has already been verified, provides accurate budgeting by confirming how much a buyer can realistically afford, and helps uncover potential credit or documentation issues early in the process. Buyers in competitive markets, first-time buyers, and anyone seeking a smoother transaction should get preapproved before scheduling showings.

Step 3: Organize financial documents

Lenders rely on documentation to validate financial information. Preparing these documents early helps speed up the process. Common items include:

• Recent pay stubs
• Two years of W-2s or federal tax returns
• Bank statements for checking, savings, and investment accounts
• Statements for debts such as credit cards, student loans, or auto loans
• Documentation for additional income sources
• Proof of identity
• Proof of available funds for the down payment and closing costs

Well-organized documentation reduces follow-up requests and helps lenders issue preapproval letters faster.

Step 4: Check creditworthiness and debt obligations

Factors like credit score, credit history, and debt-to-income ratio all play major roles when determining loan eligibility. Before applying for preapproval, review your credit reports for errors, pay down revolving balances where possible, and avoid opening new credit accounts.

The stronger your credit, the more likely you are to receive better interest rates and more loan options. In contrast, high debt levels may limit the amount a lender is willing to approve.

Step 5: Choose a lender to work with

Different lenders offer various rates, fees, and loan programs. When choosing a lender to work with, you’ll want to compare a few key items:

• Interest rates and annual percentage rates
• Closing costs and lender fees
• Loan types offered
• Down payment requirements
• Turnaround time for preapproval
• Customer support and educational resources

Mortgage preapprovals from multiple lenders within a short window typically count as one credit inquiry, which makes rate shopping both smart and safe. Be sure to only work with lenders that meet your needs, and narrow it down to a few before submitting for multiple preapprovals. 

Step 6: Submit the mortgage preapproval application

Once a lender is selected, the next step is completing the mortgage application. This involves:

• Providing personal and financial information
• Uploading the required documents
• Allowing the lender to run a hard credit check

The lender may request additional paperwork or clarifications as they review the application. Fast responses help prevent delays when looking at homes.

Step 7: Review the preapproval letter

Once your application and documentation have been reviewed, and the lender has issued preapproval, you will receive a letter confirming your eligibility. The letter will include these important details:

• The maximum loan amount
• The mortgage program offered
• Estimated rates and terms
• Conditions for final approval
• The expiration date of the letter

This letter becomes an essential tool during the home search. Real estate agents usually include it with purchase offers to show sellers that the buyer is qualified and ready to move forward.

Step 8: Maintain financial stability

It’s important to maintain your finances during the preapproval period. Avoid making major financial changes, such as taking on new debt, missing payments, changing jobs, or making large purchases. These actions can impact your eligibility and may require the lender to reevaluate your initial assessment.

Step 9: Begin the home search with confidence

With your preapproval letter ready to go, you can narrow your search to homes that fit within your budget, and use the letter to act quickly when you find one you want to put an offer on. If your offer is accepted, you’ll move on to the full underwriting process, which includes tasks like a property appraisal, title review, and final verification.

Why you should get preapproved for a mortgage

Mortgage preapproval is important because it shows sellers and agents that a buyer is financially prepared and capable of securing financing. Most sellers will not consider an offer without a preapproval letter, and many real estate agents require one before beginning a home search. 

Preapproval also helps buyers understand how much they can borrow, which sets a clearer homebuying budget, strengthens offers in competitive markets, uncovers potential issues that could affect final approval, and often leads to a smoother, faster closing process.

Typical qualifications for mortgage preapproval

Generally, lenders use specific financial metrics when evaluating applicants for preapproval. This can vary per lender, but common requirements include:

• Credit score: Minimum of 620 for most conventional loans, with higher scores improving approval odds and interest rates
• Debt-to-income ratio (DTI): Preferably 36% or lower, though many lenders allow up to 43%
• Employment history: At least two years of stable employment and consistent income
• Assets and savings: Enough funds to cover the down payment and closing costs, plus 2 to 6 months of cash reserves, depending on the loan

Differences between mortgage prequalification and preapproval

Prequalification and preapproval are similar, but they serve different purposes in the homebuying process. Prequalification is an early, informal estimate based on self-reported income and basic financial information, and it often involves only a soft credit check. 

Preapproval requires a deeper review, including verification of financial documents and a hard credit inquiry, which gives lenders a more accurate picture of a buyer’s borrowing ability. Although preapproval is not a full mortgage approval, it provides a stronger indication of what a buyer can afford, streamlines later underwriting steps, and allows buyers to shop for homes with greater confidence.

Pros and cons of mortgage preapproval

Frequently asked questions (FAQs)

Bottom line

Mortgage preapproval is a key early step in the homebuying journey. It establishes a clear budget, strengthens offers, and prepares buyers for a smoother process. By understanding each step, gathering documents, comparing lenders, and submitting a complete application, potential buyers can enter the market with confidence and a strong financial foundation.

Also read…

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• 14 Clever Real Estate Negotiation Strategies From the Pros
• How to Win a Bidding War on a House: 10 Tips for Success