2 min read

Going through the preapproval process can vastly improve your chances in a seller’s market and streamline the entire home buying experience. The preapproval process is started by simply applying for a home loan with the right lender. You’ll supply some information and documents, they’ll pull your credit, and you’ll get your preapproval letter. Here’s how it all works.

Getting started

First, find a mortgage company with experience and a good reputation, as well as stable, long term loan officers (LOs) who can guide you through the complexities of the home buying process.  Ask these questions to make sure you’re with an experienced team:

  • Does the company do home mortgages as a routine occurrence, or are you dealing with a bank employee who handles a few a month along with a million other tasks? 
  • If your loan officer is busy, or out of the office, who will get back to you if you have a question, and how fast will the response be?

In the best case scenario, you will be fully supported by your LO who is backed up by a team, so you can get answers when you need them even if your LO isn’t available.  You also want a company that has the latest technology, and is highly organized. 

Look for lenders who have a loan application process available online, as well as a portal where you can securely upload all of your documents. Ask how your lender plans to stay in constant contact with you throughout the process.    

What to submit

To get preapproved, you’ll need more than what’s required for a simple prequalification, like you may have done in the past for a credit card or when shopping for a car. A prequal just runs info you provide through an online calculator and spits out a loan amount. 

A preapproval gets all of your information and documentation and fact checks it, plus pulls your credit and looks at your income versus your monthly bills to get an idea of what you can really afford to pay back if granted a loan. 

Obviously, a preapproval is highly superior. When you’re preapproved through a reputable lender, they will make sure you have a preapproval letter you can present when making an offer on a home, so the listing agent and seller know your offer is solid.

Be prepared to provide the following:

  • Photo ID
  • Proof of employment
  • Paystubs
  • Tax records (in some cases)
  • Bank and investment account statements
  • Permission to pull your credit report  

Steps to preapproval

Ideally, you can connect with a loan officer by phone or complete your application online, with help if you need it. Upload your documents, approve the credit pull, and wait a few days. Your verification will be completed by your LO and the team, and you’ll be notified and sent your preapproval letter. If you have already found a home and want to make an offer, your lender may even be able to complete underwriting for you to strengthen your offer.

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Rates & Money is your go-to destination for free information about mortgages. Our home buyer guides and home loan articles are designed to help you make informed decisions when buying a home


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