Getting your financing sorted before you start looking is the single most useful thing you can do. It tells you what you can actually spend, and it tells a seller you are serious. In a competitive situation it is often what separates the accepted offer from the one that gets passed over.
Pre-qualified is not pre-approved
A pre-qualification is a quick estimate based on numbers you told the lender. Nothing was verified. It takes ten minutes and is worth roughly that much to a seller.
A pre-approval means the lender has collected your documents, pulled your credit, and had an underwriter look at the file. It is a conditional commitment to lend. Sellers and their agents know the difference, and so do we.
Get the real one. The extra effort up front is small compared to losing a house you wanted.
What to have ready
Lenders vary, but most will ask for:
- Two years of W-2s, and tax returns if you are self-employed or have commission income
- Your most recent pay stubs, usually covering 30 days
- Two months of statements for every account you will draw the down payment from
- Photo identification
- An explanation for any large or unusual deposit
That last one surprises people. Underwriters have to confirm your down payment is yours and not a hidden loan. A $9,000 deposit with no clear source will generate questions. If family is helping, say so early — gift funds are normal and allowed, but they come with their own paperwork, and discovering that a week before closing is no fun for anyone.
What they are looking at
Your debt-to-income ratio. Monthly debt payments against gross monthly income. This is usually the binding constraint, and it is why a car payment can cost you more house than you expect.
Your credit. Score matters, but so does the detail — recent late payments, collections, how much of your available credit you are using.
Your reserves. What is left after you close. Lenders like to see you are not emptying every account to get to the table.
Shop the loan, not just the rate
Rate is the headline, but fees, points and the quality of the lender’s work all matter. A lender who closes on time is worth real money; one who does not can cost you the house.
Ask any lender for a Loan Estimate — a standardized form that makes offers genuinely comparable. Get them from more than one lender and compare them side by side. Credit checks for mortgages within a short shopping window are generally treated as a single inquiry, so comparing does not punish your score.
We are happy to suggest local lenders we have seen perform well. We take nothing for the referral, and you are free to use anyone you like.
One thing to remember
A pre-approval is conditional. It assumes your financial picture stays roughly as it was the day they approved you. It is not a guarantee, and it can be withdrawn — which is the subject of another article on this site worth reading before you go shopping for furniture.