How To Get Pre-Approved For A Home (Your Pre-Approval Might Be Outdated!)

Whether you’re actively looking to purchase your next property or just keeping an eye on the market, understanding pre-approval can give you an edge when the right home comes along. If you haven’t obtained a pre-approval yet, or if your pre-approval is outdated (most expire after 60-90 days), now is a great time to refresh your status and be ready for the opportunities that come your way.

Know the Basics

Pre-approval is a detailed evaluation by a lender that determines how much you can borrow to buy a home. Unlike pre-qualification, which is more of an estimate based on self-reported information, pre-approval involves a thorough check of your financial situation, including your credit score, income, assets, and debts.

For home buyers, pre-approval helps you:

• Set a clear budget: You’ll know exactly how much home you can afford, which helps streamline your home search.
• Gain negotiating power: With a pre-approval letter in hand, sellers see you as a serious, credible buyer, increasing the chances your offer will be taken seriously.
• Avoid surprises: Because a lender has already reviewed your finances, you're less likely to run into issues when it comes time to secure your loan.

How to Obtain Pre-Approval

Getting pre-approved is a straightforward process, but it does require some preparation. Here’s what you’ll need to do:

1. Choose a lender: You can get pre-approval from banks, credit unions, or mortgage brokers. It’s a good idea to shop around for the best rates and terms.
2. Submit documents: Lenders will request detailed financial information, including proof of income (like pay stubs and tax returns), bank statements, and your credit report.
3. Undergo a credit check: The lender will pull your credit report to assess your credit score and history.
4. Receive your pre-approval letter: Once approved, you’ll receive a letter stating how much the lender is willing to loan you.

Pre-Approval vs. Pre-Qualification vs. Pre-Underwriting

You may have heard the terms pre-qualification and pre-underwriting used alongside pre-approval, and while they are related, they serve different purposes.

• Pre-qualification: This is a basic review of your financial situation, usually based on self-reported information. It's a quick way to get an estimate of how much you might be able to borrow but doesn’t carry much weight with sellers since it lacks a thorough financial review.
• Pre-approval: This is the next step after pre-qualification and involves a more in-depth evaluation of your finances. It’s the most common approach buyers take when preparing to make an offer on a home.
• Pre-underwriting: This takes pre-approval one step further by having an underwriter (the person who ultimately approves your loan) review all your documents before you even start house hunting. While less common, pre-underwriting gives you an even stronger position in the market and can lead to a faster closing process once you find a home.

We're Here to Help!

Getting pre-approved early gives you the flexibility to act quickly when you find the right home, and it locks in an understanding of your borrowing power before rates change.

We’re dedicated to providing expert guidance through every step of the home buying process. If you need recommendations for trusted lenders or have any questions about pre-approval, feel free to reach out. Our goal is to make sure you're fully prepared when you find your next home.

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