Before you start scrolling through Zillow or touring open houses, you’ll want to know how much you can actually spend. That’s what a mortgage pre-approval does; it gives you a budget, shows sellers you’re serious, and makes the whole buying process smoother.

Think of pre-approval as a financial green light: it doesn’t guarantee the loan just yet, but it’s your lender’s way of saying, “Yes, you’re on the right track.”

Here’s how to get it done in five straightforward steps.

What Is a Mortgage Pre-Approval?

A mortgage pre-approval is basically a lender’s way of saying, “Yes, based on your finances, we’re willing to lend you up to X amount for a home.” It’s not the final loan approval, but it’s much stronger than a quick estimate.

With a pre-approval, you’ll receive a letter stating how much you qualify for, what loan programs might fit, and an estimate of your interest rate. Sellers love it because it shows you’re serious, and it gives you the confidence to house-hunt within a clear budget. Most importantly, it keeps you from wasting time and breaking your heart on a house you can’t qualify for.

5 Steps to Get Pre-Approved for a Home Loan

Step 1: Take a Look at Your Credit

Your credit score is the first thing lenders check. It’s basically your financial report card, and the higher it is, the more likely you are to snag a lower interest rate.

• A score of 620 or higher usually qualifies you for a conventional loan.
• FHA and VA loans may allow lower scores.
• Before applying, pull your free credit report and fix any errors. Something as small as a mistake on your file can cost you.

Step 2: Gather Your Paperwork

Self-employed or 1099? Some lenders use bank statements instead of tax returns to document income. If that’s you, estimate what you might qualify for before applying by using a bank statement loan calculator from Griffin Funding. It analyzes 12–24 months of deposits, lets you input housing costs and other debts, and helps you see whether your DTI aligns with common guidelines (like 28/36%). Bringing a calculator-backed estimate to your lender can streamline pre-approval and highlight any gaps in savings, reserve requirements, or income documentation specific to bank statement loans.

Lenders don’t just take your word for it. They’ll want to see proof of your income, savings, and debts. Having these documents ready will save you headaches later:

• Pay stubs (usually the last 30 days)
• W-2s or 1099s from the past two years
• Recent bank statements
• Tax returns
• Investment or retirement account statements

Step 3: Know Your Debt-to-Income Ratio

Here’s a fancy term you’ll hear a lot: DTI (Debt-to-Income ratio). It’s how much of your monthly income goes toward paying off debt.

Lenders love a low DTI because it shows you aren’t stretched too thin.

• Aim for under 36% if you can.
• Some programs allow up to 43%, but the lower your ratio, the better.

If yours is a little high, paying down credit cards or avoiding new loans can help.

Step 4: Shop Around for Lenders

Not all lenders are created equal. Some might offer better interest rates, while others have lower fees or more flexible programs.

Check out:

• Traditional banks
• Credit unions
• Online mortgage lenders
• Mortgage brokers who can compare multiple options for you

It’s worth getting at least three quotes. Even a half a percent difference in your rate can save you thousands over the life of your loan.

Step 5: Submit Your Application

Once you’ve done your homework, it’s time to actually apply. This is where you officially hand over your paperwork and let the lender crunch the numbers.

• Fill out the application (online or in-person).
• Upload or hand over your documents.
• Wait for your pre-approval letter; most lenders turn it around in a few days.

Keep in mind: pre-approval letters are usually good for 60–90 days. If you don’t find a house within that window, you may need to update your info.

Home Loan Pre-Approval vs. Pre-Qualification

These two terms get tossed around a lot, but they’re not the same.

• Pre-Qualification: A more surface-level look at your finances. It’s usually based on self-reported numbers and doesn’t require hard credit checks. Think of it as an informal ballpark figure.
• Pre-Approval: A deeper dive into your finances. The lender checks your credit, verifies your income, and reviews your debt-to-income ratio. It carries much more weight in the buying process.

If you’re serious about purchasing a home, pre-approval is the one that will matter most.

The Benefits of a Mortgage Pre-Approval

Getting pre-approved can actually give you a real edge in the homebuying process. Here’s why:

• Sets Your Budget: Pre-approval gives you a clear picture of what you can afford. You won’t waste time touring homes out of your price range.
• Strengthens Your Offer: In competitive markets, sellers often won’t even consider buyers without a pre-approval letter. It shows you’re serious and financially ready.
• Saves Time: Much of the heavy lifting: credit checks, income verification, and documentation, is already done, so final approval can move faster once you’ve made an offer.
• Locks in Your Interest Rate (Sometimes): Some lenders may let you lock in an interest rate at pre-approval, protecting you if rates rise while you house hunt.
• Highlights Issues Early: If your credit, income, or debt-to-income ratio needs improvement, pre-approval gives you a chance to fix things before you’re under contract.
• Prevents Heartbreak: It keeps you from falling in love with a home, only to find out later you can’t qualify for the mortgage.

When Should You Get Pre-Approved for a Mortgage?

The best time to get pre-approved is before you start house-hunting. That way, you’ll know your budget and won’t waste time looking at homes outside your range.

If you’re just casually browsing, you can wait. But if you’re serious about buying in the next few months, getting pre-approved early can help you move quickly when you find the right place.

How Long Does Mortgage Pre-Approval Last?

A mortgage pre-approval usually lasts about 60 to 90 days. After that, lenders want to take another look at your finances, credit, and the current interest rates to make sure nothing has changed.

If your pre-approval expires before you’ve found a home, don’t worry, you can renew it. The second time around is often quicker since the lender already has most of your paperwork.

To make things easier, try to keep your finances steady while you’re house-hunting. That means no new loans, no big purchases, and ideally, no job changes until you’ve closed on your home.

Bottom Line

Getting ready for the pre-approval process can be daunting, but it doesn’t have to be. With the right prep: checking your credit, gathering documents, understanding your DTI (debt-to-income ratio), comparing lenders, and applying, you’ll have a way clearer picture of your buying power.

And in a competitive housing market, that pre-approval letter could be the difference between landing your dream home and losing out.

FAQs

1. Do mortgage preapprovals affect your credit score?

Yes, most lenders do a hard inquiry, which may temporarily lower your score by a few points. It’s a small trade-off for the benefits of pre-approval.

2. How long does it take to get preapproved for a mortgage?

If you have your documents ready, many lenders can issue a pre-approval in 1–3 business days.

3. What documents do you need for a mortgage preapproval?

Common documents include pay stubs, W-2s or 1099s, bank statements, tax returns, and proof of assets.

4. How much do you need to make to get preapproved for a $500,000 mortgage?

It depends on your down payment, debts, and loan type. As a rough guide, you’d typically need an income of around $100,000–$120,000 a year, assuming minimal other debt.