A mortgage pre-approval is a lender’s conditional commitment to loan you a specific amount of money for a home purchase. It’s based on a review of your financial documents — income, assets, debt, and credit. In most real estate markets, a pre-approval letter is essential before making an offer on a home.
Pre-approval vs pre-qualification
Pre-qualification is a quick, informal estimate based on self-reported information — no documents verified, no credit pull. Pre-approval is a thorough review with document verification and a hard credit pull. Pre-approval carries real weight with sellers. Pre-qualification is mostly meaningless in competitive markets.
What you need to get pre-approved
W-2s or tax returns for the past 2 years, recent pay stubs (last 30 days), bank statements (last 2–3 months), investment and retirement account statements, government-issued ID, and your Social Security number. Self-employed buyers need 2 years of tax returns and profit/loss statements.
How long does pre-approval take?
Online lenders can often issue a pre-approval letter within 24–48 hours. Traditional banks may take 3–5 business days. In competitive markets, having a pre-approval letter ready before you start touring homes is essential — you may need to make an offer the day you see a house.
Get pre-approved by multiple lenders
Apply to at least 2–3 lenders and compare rates. Multiple mortgage inquiries within a 14–45 day window count as a single inquiry for credit scoring purposes, so there’s no reason not to shop. Even a 0.25% difference in interest rate can mean $15,000–$20,000 over the life of a 30-year mortgage on a $300,000 loan.