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How To Increase Your Mortgage Preapproval Amount

Victoria Araj5-Minute Read

June 23, 2022


Buying a house is a major financial commitment. Striking the right balance between the dreams you have for your future home with the reality of your monthly mortgage payment can take some time. But without the right mortgage preapproval amount, it can be even more challenging to find the perfect fit.

If it makes sense for your finances, increasing your mortgage preapproval amount might be possible. Let’s dive into how to increase your mortgage preapproval amount for a smoother home search.

What Is A Mortgage Preapproval?

A mortgage preapproval is a process that determines how much money you can borrow for your home purchase. Before a lender grants a preapproval, it will look at your complete financial picture, including information about your income, assets and credit score. To do this, you’ll need to submit specific documents that are required by your lender as proof that you can afford the loan’s monthly payments.

What the lender finds on its deep dive into your finances will impact the preapproval amount it grants you. Beyond how much you can borrow, your preapproval typically includes information about what your interest rate might be.

The amount you are preapproved for is not necessarily the final maximum you can afford on your home purchase. If you think that your finances can handle more mortgage, then there are ways to increase your mortgage preapproval amount. Here’s how:

  • Find a co-signer
  • Improve your credit score
  • Boost your income
  • Pay off other debts
  • Make a larger down payment
  • Talk to another lender

A larger preapproval amount can allow you to consider a wider range of homes.

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8 Tips To Help You Get Approved For A Higher Mortgage Loan

If you aren’t satisfied with your initial preapproval amount, there are steps you can take to possibly unlock a higher mortgage loan amount.

Before you jump into increasing your mortgage loan amount, consider whether you can truly afford the bigger payments. Take the time to realistically assess your budget before attempting to increase your preapproval amount.

If you decide that a larger preapproval amount is the right move for your finances, there are several ways to give that amount a boost. Here’s a closer look at how to get approved for a higher mortgage loan. Consider these actionable steps:

1. Improve Your Credit Score

A good first step is to look at your credit report to see where you stand. If you already have a great credit score, there’s not too much you can do. But if you have a credit score that could stand some improvement, then take action.

When you improve your credit score, a lender may be willing to increase your preapproval amount. Additionally, a higher credit score may be able to lower your interest rate.

2. Generate More Income

A bigger income can lead to a larger preapproval amount. That’s because you’ll be able to handle a larger mortgage payment with more money coming in every month.

Of course, generating more income can be easier said than done. With that, it pays to think through all of your income sources. Chances are that you only included your W-2 income on your application. But you can go back to include other sources of income.

A few easily overlooked sources of income include alimony, child support, disability income, VA benefits, retirement benefits, side hustles, and bonuses. If your household receives compensation in any way, you may be able to include that income on your application.

3. Pay Off Debts

When determining how much you can borrow, a lender will look at your monthly debt payments. If you have an extensive monthly debt burden, your preapproval amount will be lower. But if you can eliminate some of these debts from your books, then a lender may be willing to increase your preapproval amount.

4. Find A Different Lender

Not all lenders view things in the same way. If a mortgage lender provides a low preapproval amount, then you may decide to fill out another mortgage application with a different lender. In some cases, you may find that switching lenders makes all the difference.

5. Make A Down Payment Of 20%

A larger down payment can go a long way. If you can make a down payment of at least 20% of the total purchase price, you may be approved for a higher loan amount.

That’s because putting down 20% eliminates private mortgage insurance, which is a cost tacked onto your monthly payments. The lender may increase your preapproval amount without mortgage insurance adding to your monthly mortgage.

6. Apply For A Longer Loan Term

A loan with a longer term allows you to stretch out your mortgage balance out over more payments. A longer term will lead to more affordable monthly payments in most cases. With that, a lender may be willing to lend you more if the loan is set for a longer time frame.

7. Find A Co-Signer

Closing a mortgage with a co-signer is typically not ideal for the co-signer. Although you’d be living in the house, their assets would be on the line if you could not keep up with your mortgage payments. With that, it can be challenging to find a willing co-signer.

It may be difficult to find a co-signer. But if you can find a willing family member or friend with a high enough income, then you may be able to give your preapproval amount a boost.

8. Find A More Affordable Property

Ultimately, you may not be able to increase your mortgage amount. But that doesn’t mean homeownership isn’t in the cards. Instead, you’ll have to start searching for a more affordable property.

If you aren’t sure how much you can afford, consider using a mortgage calculator to see how the numbers work out. You can play around with the options to find the most affordable option for your situation.

But if you want to make things more specific to your situation, check out our home affordability calculator. It will allow you to run the numbers on what home price you can afford right now.

Let a pro do it for you.

Find a top-rated pro to help on HomeAdvisor.

How Much Will I Be Preapproved For?

A mortgage lender will look at your income, assets, and credit score when evaluating your application. The details of your financial situation will dramatically impact the amount you are preapproved for.

But no matter what you are initially preapproved for, you should decide for yourself what size mortgage payment will fit into your budget. Most experts recommend that you don’t spend more than 30% of your gross monthly income on your housing costs, including homeowners insurance, HOA dues, and utilities. Although it’s incredibly tempting to seek out a more expensive home with all of the items on your wish list, your current budget may not be able to support a larger home loan.

The Bottom Line

If you want to unlock a larger preapproval amount, it may be possible. Start the process with Rocket Mortgage® and get approved today.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

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Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.