How to Get Pre-Approved for a Home Loan

Pre-approval is the first step in the home buying process. It is a guarantee from a lender that you are qualified for a certain amount of money at a specified interest rate, and signals to sellers and real estate professionals that you are a serious buyer. Gather all requisite documents, meet with a loan representative, submit your application and accept your pre-approval letter for the amount you can borrow.

• Shop around and look at different lenders, comparing loan programs and rates. Keep in mind that most buyers can obtain a real estate loan, but the goal is to get a loan with the lowest rate and best possible terms. By meeting with loan officers in advance and exploring your options, you will find the loan that best meets your needs and also how much you can afford.


• Select your loan program taking into consideration such factors as how long you plan on living in the home, current and future income, and lifestyle changes.


• Get pre-qualified for your loan. This is part of the process in which you initially meet with a loan officer to discuss your expense ratio (income and expenses), your credit and the amount of your down payment. Afterwards, you will have an idea of the price range you can afford.


• Provide the lender with the required documentation. You will need your tax returns from the last two years, W-2s, recent pay stubs and bank account statements. Also gather proof of other sources of income such as interest and dividend income, alimony, social security payments and retirement benefits. In addition, you will need to give authorization for your credit report to be pulled.


• Wait for your information to be verified. Once your income and credit is confirmed, the lender will give you a pre-approval letter. This states that your loan will be approved once you have made a purchase offer on a home.