Getting a Mortgage Preapproval to Buy a Home
Last Updated: September 13, 2022

Getting a Mortgage Preapproval to Buy a Home

Having a mortgage preapproval in hand gives you the best opportunity to have your offer accepted by a home seller. So, it’s time to get one now if you have been checking out homes but have not received a preapproval letter from a lender.

Understanding the Difference Between Pre-qualification and Preapproval

Pre-qualification: This typically is an early process where your lender runs your credit report and uses the income and assets you self-report to see if you are eligible for the mortgage. A pre-qualification can be instant or can take one day or two. It’s important to have a pre-qualification letter because the sellers will know you’re serious about home buying. See why below.

To learn if you can qualify, apply here.

Preapproval: When you get preapproved for a mortgage, the lender receives most of the important documents (credit report, income, assets) they need to accurately determine what loan program you qualify for and how much. Sellers will have a comfort level that you will be able to close your mortgage promptly if you give them a preapproval certificate with your offer

What will you need to have ready to be reviewed by a lender, and why?

  • Review credit report: know your credit score because lenders will use your credit score to determine your creditworthiness. One way to review your credit report is to get a copy of your credit report at It is important to review your three reports before applying for a loan to correct any errors. Remember that your mortgage rate can be affected by your credit score.


  • Proof of Income: This is a typical request that lenders ask you to provide. They will want to know where the income is coming from so they have evidence that you can make your monthly payments for your mortgage loan. Traditionally, you had to submit pay stubs manually, but thanks to automation, you can submit all proof of income via the lender’s portal or email. Aside from providing W-2 forms, your lenders will require your last two years of federal tax returns.


  • Proof of Assets: Lenders will look at your assets and see which ones can be converted into cash. You can quickly determine your net worth by taking your assets and subtracting your debts and liabilities. Assets are all money in your bank account, vehicles, cash value insurance policies, personal possessions like gold, etc. Your liabilities include your loan balances on your car or personal loans, credit card balances, student loan balances, etc.

Understanding The Actual Mortgage Application (Uniform Residential Loan Application)

Now that you understand the meaning of pre-qualification and preapprovals, and know what you will need to prove to the lender that you can afford a home, let’s go over the actual mortgage application, also known as 1003. By learning about the 1003, you will understand what lenders ask for when applying for a mortgage, section by section.

There are 8 sections of information that you will need to complete when applying for a mortgage loan.

Section 1: Borrower Information

For this section, you will be asked for your personal information, such as your first and last name, social security number, and date of birth. You will be asked if you are applying individually or with someone else. In this section, they also want to know your income sources and any previous address.

Section 2: Financial Information-Assets and Liabilities

This section asks you to enter each account’s assets for bank accounts and any other liquid accounts. Any gifts will also be included here, and anything with a cash value is an asset.

In this section, you also include your liabilities which are any debts, leases, and credit cards you owe.

Section 3: Financial Information-Real Estate

Here you would enter any property you currently own, and if you don’t own any real estate, you can make that selection here.

Section 4: Loan and Property Information

In this section, you are asked to enter the loan amount you are applying for and the purpose of the transaction. It can either be a purchase or refinance.

Start looking at your options

Promise Home Loans is here to help.

Section 5: Declarations

In this section, you answer no and yes questions such as, do you have any judgments against you?

Section 6: Acknowledgement and Agreements

This section is all the legal jargon about your obligations. This section is where you sign and date.

Section 7: Military Service

In this section, you are asked if you are or were in the military or your deceased spouse.

Section 8: Demographic Information

You are asked about your race, sex, and ethnicity in this section. Remember that you don’t have to provide this information if you don’t want to.

Questions you may have before getting preapproved

Should I get a preapproval ahead of time?

In most cases, it’s a good idea, especially if you want to get your offer the proper attention. One reason you don’t want to wait until the last minute to get preapproved is that looking for all the required documentation and dealing with the vendors simultaneously can be stressful. Start as early as possible so that you have time to react to any unforeseen issues.

How much time should I set aside to get my mortgage preapproved?

Once you have your documents handy, getting preapproved typically should take less than an hour. To get preapproved online, click here.

How long does a preapproval last?

Typically 60 days, but some dated documents may have to be updated.

Do preapprovals hurt credit scores?

Credit scores can drop a few points when the lender pulls your credit report, but without this type of “hard” credit pull, there is no way for you to get a true preapproval.

Does preapproval mean you are approved?

No, until your file is completely underwritten and all documents have been reviewed, including an appraisal in some cases, you are considered “approved waiting for conditions.” In other words, till the lender has signed off everything, you cannot close your mortgage.

For example, lenders will order an appraisal of the property to assess the property’s value. Another important factor lenders review is the title of the property. They will do a title search to ensure there are no claims or liens on the property you’re buying.

How to increase your chances of getting preapproved? 

Keep your debt load to a minimum, pay your bills on time, save more than enough for your down payment, and monitor your credit score. Correct a mistake in your credit reports if you see an error. You can also make sure you show consistent income coming in. In the end, if you really need help, ask someone to cosign with you.

Who decides what type of loan preapproval I need?

You do, but having a true preapproval certificate will help your chances of getting your offer accepted.

How do I get notified if I have been preapproved?

Typically your loan officer will advise you and send you a certificate to use when making offers.

Where can I find down payment assistance?

Your loan officer is probably the best place to start.

What are Down payment Gifts?

Some programs allow “gift funds” to be given to you to be used towards your down payment or closing costs. Usually, these need to come from a family member.

Can I get a mortgage preapproval if I am self-employed?

Yes, usually, 2 years of personal and company tax returns are required along with a recent profit and loss statement.

Getting your mortgage preapproval certificate?

Contact Promise Home Loans and tell them you are looking to get preapproved for a mortgage. They will review your options, guide you to the best program that fits your needs and deliver a preapproval certificate you can use with your offer. They will also refer you to one of their Preferred Real Estate Agents in your area if you don’t have an Agent representing you yet.

Types of loan programs out there?

Conventional 30-year fixed-rate mortgage

The 30-year fixed-rate mortgage is a home loan with an interest rate that’s set for the entire 30-year term.

  • Most popular home loan;
  • Your interest rate never changes;
  • Lower monthly payments compared with shorter-term loans.
  • Best for: Home buyers who want the lower monthly payment from stretching out repayment over a long time. The fixed-rate makes the payment predictable. A 30-year fixed offers flexibility to repay the loan faster by adding to monthly payments.

Conventional 15-year fixed-rate mortgage

The 15-year fixed-rate mortgage has an interest rate that remains the same over its 15-year term.

  • They are often used for refinancing.
  • The interest rate is set for the life of the loan.
  • Lower interest rate compared with longer-term loans.
  • Higher monthly payment than with 30-year loans, with less total interest paid.
  • Best for refinancers and home buyers who want to build equity and pay off the loan faster. Payments are predictable because the interest rate doesn’t change. Because the borrower pays interest for fewer years, total interest payments are less.

Adjustable-rate mortgage

An adjustable-rate mortgage is a home loan with an initial rate fixed for a specified period, then adjusted periodically. For example, a 5/1 ARM has an interest rate set for the first five years and then adjusts annually.

  • The initial “teaser rate” is lower than on most other loans, giving comparatively lower monthly payments at first.
  • Initial rates can often be locked for one, five, seven, or 10 years.
  • Best for home buyers who don’t plan on having a mortgage for a long time or believe interest rates will be lower in the future.

FHA mortgage

An FHA mortgage is a home loan insured by the Federal Housing Administration. FHA loans are backed by the government and designed to help borrowers of more modest means buy a home.

  • Allows down payments as low as 3.5%.
  • Credit scores as low as 500 can qualify.
  • Mortgage insurance premium payments are required.
  • Best for borrowers with lower credit scores and a down payment of less than 20%.

VA mortgage

VA loans are mortgages backed by the Department of Veterans Affairs and are available to military service members and veterans.

  • No mortgage insurance.
  • No down payment required
  •  Upfront VA funding fee required.
  • Best for Military-qualified borrowers who appreciate a low-interest rate and no down payment minimum.

USDA mortgage

USDA home loans are mortgages backed or issued by the U.S. Department of Agriculture.

  • No down payment is required on most properties.
  • Home improvement loans and grants are also available.
  • Income limits and property value caps apply.
  • Best for Income-qualified buyers in rural and some suburban areas who want a low or zero down payment.

Jumbo mortgage

Jumbo home loans are mortgages above a certain dollar amount. Jumbo loan limits vary by county and are adjusted periodically

  • It can have fixed or adjustable rates.
  • Often require a credit score of 700 or higher.
  • Usually require a down payment of 10% or more.
  • Best for buyers of expensive homes and owners who want to refinance jumbo-size mortgages.

Can I get a preapproval if I already have a mortgage?

When getting preapproved, your current mortgage would be considered in the approval process based on whether you would pay off your existing mortgage (selling your current home) or keep it as a rental or second home.

The Bottom Line

Before you start your home-buying journey, getting preapproved before anything else is smart. Once you contact a Real Estate Agent, they will know you’re serious about finding a home, and both the Agent and Seller will know you can close on the purchase on time. Get pre approved online.

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