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5 Things You Need to Get that Pre-Approval Letter

James Haydon

Team Lead and Chief Fire 🔥Starter @ The Haydon Team. Jim believes in 110% care for his clients...

Team Lead and Chief Fire 🔥Starter @ The Haydon Team. Jim believes in 110% care for his clients...

Feb 8 5 minutes read

While it has become very convenient to potential home buyers to look for your dream home especially with everything that is available online, serious home buyers need to start the process at a lender's office and not on a mobile app. Talking to a lender will give you an opportunity to discuss loan options and budgeting. The lender will also pull your credit report and based on the results can provide you the information as to how much you can be approved for thus giving you a set price range for your future home. And most importantly, home sellers expect that all buyers have a pre-approval letter to show that they can secure financing in buying a home.

Pre-Qualification vs Pre-Approval


When a person wants to buy a home with a loan the first thing they must do is get "prequalified." Prequalification acts as a dry run of the loan application process. The mortgage lender will use details the home buyer provides about their credit, income, assets and debts to arrive at an estimate of how much mortgage they can afford. The whole process may take only minutes, or a few hours at most, and is usually free. While a "pre-qual" is non-binding to the lender (because the information the buyer provides has not been verified), it does serve as a good indication to potential sellers of their general creditworthiness.


Pre-Approval takes prequalification one step further. The lender will contact the buyer's employer, bank and others to verify your income, assets, debts and credit history, and then issue a letter stating that the buyer's mortgage is approved for a certain amount within a certain time. The buyer may be charged a small fee to cover the cost of your credit reports and application, often refunded at closing.

If you're ready to take that step to home ownership, Getting a Home Loan Pre-Approval should be at the top of your list. But what are the things needed to secure a pre-approval?

Here are 5 things you need to know to get one step closer to owning that dream home

These are the standard requirements that lenders would be looking if you wanted to secure a Home Loan Pre-Approval:

1. Proof of Income

If you are looking to purchase anytime soon and wanted to get pre-approved for a home loan, you should be prepared with W-2 statements for the last two years, pay stubs that show your monthly income, proof of additional income such as alimony or bonuses and your two most recent tax returns.

2. Proof of Asset

Aside from providing a proof of income that will show that you have a steady source of monthly income, providing bank statements and investment account statements will help prove that you have enough money to cover the cost of the down payment and closing fees. Having enough cash reserves will also show a healthy financial standing.

3. Good Credit Standing

Having a good credit standing can definitely increase your chances of getting pre-approved for a home loan. Most mortgage lenders reserve the lowest interest rates for customers with a credit score of 740 or above. If your credit scores fall below that, it might mean a little more in interest rates or you may have to pay additional discount points to lower the rate.

4. Background Check

Showing your pay stubs is just the tip of the iceberg, all lenders do background checks to help verify your source of income and to know that you have a stable employment to pay off the monthly mortgage. For self-employed applicants, providing additional paperwork for your business and income is necessary.

5. ID Verification and Documentation

All lenders would require a copy of your driver's license and social security number as well as your signature to pull your credit report. Most lenders would require additional documentation during the pre-approval process and your cooperation would entail a smooth and faster pre-approval for a home loan.

Talking to a lender before you start the home buying process can save you a lot of time, effort, and heartache for later. Be prepared with all the documents needed and print off bank statements from your online account before your appointment with the lender and before you begin house hunting.

Take the next step to owning that dream home.

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