How to Get Pre-Approved for a Mortgage

Getting a mortgage pre-approval from a lender is a crucial first step when you’re ready to buy a home. It helps you determine how much house you can afford and shows realtors and sellers that you’re a serious contender. Learn how to get pre-approved for a mortgage – it’s easier than you think!

A mortgage pre-approval is a preliminary assessment of a potential borrower’s financial standing by a lender to determine if the borrower will be eligible for a loan. When applying for a pre-approval, a lender will review your assets, income, level of debt and more. Getting pre-approved for a mortgage should be the first concrete step in your homebuying process.

If you’re in the market for a new home, it’s best to get a mortgage pre-approval before you start your search. Why so soon? Because it will tell you how much house you can afford, show potential sellers and realtors that you’re serious about buying and provide you with the opportunity to discuss loan options and mortgage budgeting with your lender.

Fortunately, getting your pre-approval is a simple and straightforward process. Below, we’ve highlighted the differences between a prequalification and a pre-approval and outlined the steps you need to take to get pre-approved before you shop for a new home.

Pre-approval vs. Pre-qualification

A mortgage pre-approval and a pre-qualification are both letters stating a lender has agreed to grant a loan to the borrower, but there is an important distinction between the two. A pre-qualification is simpler and only offers a quick snapshot of the borrower’s finances (along with an estimate of how large a loan they will qualify for). A pre-approval, on the other hand, includes a formal, in-depth look at the borrower’s financials.

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How to Get Your Pre-Approval

When you’re ready to apply for a mortgage pre-approval, take the following steps:

  • Calculate your debt-to-income ratio. Your debt-to-income ratio, or DTI, is the percentage of your gross monthly income that goes toward paying down debts — including credit card debt, student loans, car payments and more. Lenders generally prefer a DTI of 36% or lower, including mortgage payments.
  • Check your credit score and history. While there are homebuying options available for those with lower scores, you’ll get more favorable interest rates with a FICO score in the very good to excellent range (around 740 and above). Some financial institutions offer regular credit updates or reports at no cost to their customers. You can also request your credit report once a year at no charge from annualcreditreport.com.
  • Determine how much house you can afford. Before moving ahead, you’ll need to know how large of a down payment you can afford, what kind of a budget you have for closing costs and how much you can comfortably pay toward a monthly mortgage. A pre-approval will give you the maximum amount the lender will finance for you, but you also need to be personally comfortable with the payment amount.

Use a home purchase calculator like this one to figure out how much home you can get with your desired monthly payment. Remember that most home loans have a term of 15 or 30 years.

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Results received from this calculator are designed for comparative purposes only, and accuracy is not guaranteed.



  • Gather the necessary information and documentation. You’ll need the following financial documents when applying for a pre-approval:
    • Your Social Security number
    • Current residential addresses and employment details for you and your co-borrower (if you have one)
    • Financial and investment account information
    • Proof of income
    • Most recent W-2 tax forms, 1099s and proof of any additional income
  • Choose your lender. Spend some time researching potential lenders before making your choice. Consider mortgage brokers and credit unions as your possible sources. Look for a lender that offers low interest rates and a positive service experience. Remember, this purchase may be the biggest one you’ll ever make — so be sure to choose a loan partner you can trust.

If you’re in the market for a new home, you’re probably already scouring real estate listings and eyeballing open houses. But make sure to run the numbers with your lender before you run out and find the perfect pad. Having a pre-approval in hand can mean the difference between getting your dream home and seeing it snatched up by someone else who has their paperwork in order before they shop.

Getting a mortgage pre-approval is a crucial part of the homebuying process, but it doesn’t have to be complicated. Follow the steps outlined above to get your pre-approval in hand before you start your search and you’ll be planning furniture layouts and picking out paint colors in no time!

Get pre-approved for a home loan with Desert Financial.


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Mortgage loans are offered by Define Mortgage Solutions, LLC, NMLS ID #1761612, a subsidiary of Desert Financial Credit Union. BK#0949053

The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.