What You Need to Know About Mortgage Pre-Approval

Mortgage application and house keys

Getting a pre-approval is a vital step to obtaining a mortgage. Without it, looking for a house and applying for a loan can be complicated. Although a pre-approval doesn't guarantee that you will get the loan you want, it does increase your chances significantly.


Learn what a pre-approval is, why you need one, and what are the requirements you should have.


What is a mortgage pre-approval?


Many home mortgage loans in Salt Lake City and other major cities require a pre-approval before they can give you a mortgage. Getting pre-approved means a loan officer has considered several factors in your finances and deems you able to pay back a loan. In this process, they will also determine how much of a house you can afford, how much you can afford to pay monthly, and what your interest rate should be.


When getting pre-approved, lenders will consider the following factors:


  • Credit score
  • Credit history
  • Income
  • Employment history
  • Debt-to-income ratio
  • Assets
  • Liabilities


Why do I need a pre-approval?


Acquiring a pre-approval from a lender provides several advantages for your house-hunting experience, which include:


  • Seller confidence. Presenting a pre-approval letter to sellers will let them know that you can actually afford the house. This will help you catch the interest of sellers and possibly beat other people who want to buy the same house.
  • Buyer confidence. At the same time, a pre-approval will let you know how much you can realistically afford, which will make house-hunting easier for you.
  • Credibility. If you are pre-approved for a mortgage, it means that you are serious about buying a house and have the financial capability to do so. People will be much more willing to sell to a credible buyer who they know won't get denied for a mortgage.
  • Faster process. You've already submitted most of the requirements to the lender during the pre-approval process. When you finally decide on a home you want to buy, the mortgage process will be much faster.


When should I get pre-approved?


Pre-approval letters are usually valid for two to three months, so if you intend to buy a house soon, you must get pre-approved at least 30 or 60 days in advance.


You can still get a pre-approval even if you don't want to buy a house right away. Doing so can let you see where you stand financially and give you an idea of what aspects you need to improve. Get pre-approved at least six months to a year before seriously looking for a house so that you have enough time to save money, improve your credit score, or seek a higher income job.


What are the requirements for a pre-approval?


You need to bring the following documents with you to the lender's office:




  • SSN card or number
  • U.S. passport or driver's license
  • Copy of your green card (if you are not a U.S. citizen)
  • Proof of employment
  • Credit history


Income and Assets


  • Pay stubs from the last 30 days
  • W-2 forms from the previous 2 years
  • Federal or business income tax returns
  • Proof of other income
  • Bank statements (evidence that you have money for the downpayment and closing costs)
  • Gift letter (if another person is helping you with the downpayment)
  • Statements of asset accounts from the last quarter


If you're planning to buy a home soon, a pre-approval is necessary. But before you go to your preferred lender, refer to this guide for the necessary information you need.

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