One Homebuying Step You Don’t Want To Skip: Pre-Approval

If you’re planning to buy a home, there’s one step you don’t want to skip—getting pre-approved. It’s an essential part of the process that sets you up for success and gives you a major advantage in today’s market.

What Is Pre-Approval?

Pre-approval is like getting a green light from a lender. It tells you how much you’re qualified to borrow based on your financial history. To determine that, a lender may ask for:
📄 W-2s (last 2 years)
📄 Tax returns (last 2 years)
📄 Recent pay stubs (last 30 days)
📄 Bank statements (last 60 days)
📄 Investment account statements (if applicable)
📄 Rental history (last 2 years)

After reviewing these, your lender will provide a pre-approval letter showing how much they’re willing to lend you. But remember—any big financial changes (like switching jobs, taking out loans, or opening new credit cards) can affect your pre-approval status!

How Pre-Approval Helps You

🔹 Know Your Budget 💰 – Pre-approval helps you determine how much you can comfortably afford, so you don’t fall in love with a home that’s out of your price range.
🔹 Understand Your Monthly Payments 🏦 – With mortgage rates fluctuating, pre-approval helps you see how current rates impact your monthly costs.
🔹 Make a Stronger Offer 🏠 – Sellers prefer buyers who are pre-approved because it shows you’re serious and financially prepared to move forward.

As Greg McBride, Chief Financial Analyst at Bankrate, explains:

“Preapproval carries more weight because lenders have actually done more than a cursory review of your credit and finances . . . A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage.”

Bottom Line

If buying a home is on your to-do list, start with pre-approval. It’ll help you set a clear budget, strengthen your offer, and navigate the process with confidence.

Need help getting started? Let’s connect with a trusted lender today!

Finding ways to make your credit score better could help you get a lower mortgage rate. When you’re ready to get the process started, let’s connect.