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How To Get A Mortgage Preapproval

Victoria Araj8-minute read

January 10, 2023

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It can be hard to shop for a home without knowing how much you can afford. Mortgage preapproval lets you shop smarter and make stronger offers. Let’s look at what it means to get preapproved and how to get started.

What Is A Mortgage Preapproval?

Mortgage preapproval is the process of determining how much money you can borrow to buy a home. Lenders such as Rocket Mortgage® look at your income, assets and credit score and determine what loans you could be approved for, how much you can borrow and what your interest rate might be.

Preapproval Vs. Prequalification

Preapproval and prequalification are both ways of understanding how much you’ll be able to get approved for. There are some slight differences between these two processes, though some lenders use these terms interchangeably.

A mortgage prequalification is like a preapproval, but it may not be as accurate. With a prequalification, you won’t have to provide as much information about your finances, and your lender won’t pull your credit.

Without your credit report, your lender can only give you rough estimates. This means the approval amount, loan program and interest rate might change as the lender gets more information. Because a prequalification is an initial review of your finances, you usually don’t need to supply documentation (like bank statements and pay stubs) during this stage.

Preapprovals for a mortgage are more in-depth than prequalifications. When you get preapproved, you may be required to provide information or documents like bank statements and pay stubs to prove your income and the funds you’re using to get the loan. A preapproval will also require a hard credit check so your lender can get your credit score and see how much other debt you have (Rocket Mortgage only requires a soft credit pull initially for mortgage approval).

Preapproval Vs. Approval

A preapproval is helpful when you’re shopping for a home, but you’ll need to get a full approval once you find your home, and simply getting a preapproval before you start looking at properties doesn't guarantee you’ll get approved. For your lender, this process includes making sure the property details check out.

Here are a few property details your lender will need to approve:

  • The appraisal value: Your lender will order an appraisal of the home to make sure you’re not paying more for the home than it’s actually worth. An appraisal that comes back lower than the purchase price could pose problems for your loan.
  • The title: Your lender will work with a title company to confirm who owns the property and make sure there are no claims or liens against it.
  • The home’s condition: Some loans require that the property meets certain standards before the loan can close. For instance, if you’re purchasing the home with an FHA loan, things like cracked windows, missing handrails or a roof in poor condition could keep the loan from closing.

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How To Get Preapproved For A Mortgage

Before you can get a home loan preapproval, work with your lender to verify your financial information and obtain a loan estimate. Let’s walk through each of the steps and review the parts of the process you’ll be responsible for.

Collect Your Documentation

The preapproval process is essentially a mortgage application. This means your lender or loan officer will want to take a comprehensive look at your finances. You should be prepared to provide information on the following:

  • Proof of income
  • Employment verification
  • Proof of assets
  • Credit history
  • Identification
  • Debt-to-income ratio (DTI)

Before starting the preapproval process, you'll want the necessary documentation to ensure the process goes smoothly. Here are a few items you should have on your mortgage preapproval checklist:

  • W-2 statements
  • Pay stubs
  • Bank statements
  • Driver’s license
  • Social Security number

Once you’ve submitted all your information to the lender, you can expect to receive your loan estimate within 3 business days, though this may be much shorter if you use an online mortgage lender. The loan estimate will let you know whether you’ve been preapproved and for how much.

Know When To Get Preapproved

Preapproval isn’t just for your lender. Knowing how much mortgage you can expect to take out is also highly beneficial to you as a home buyer, and it can help you narrow down and focus on your best options.

That means the best time to get preapproved is at the start of your home buying journey. If you know you’re in the market for a new home, apply for preapproval early to get a picture of your mortgage options and show agents you’re a serious buyer.

Get Your Credit Score Checked

Preapproval usually requires a hard inquiry into your credit. While this may cause your credit score to drop slightly, getting preapproved won’t hurt your credit in a significant way. Subsequent inquiries from other mortgage lenders within the same time period (usually about 45 days) won’t affect your score at all. And best of all, Rocket Mortgage usually only requires a soft pull at this point in your mortgage journey, and soft pulls have no effect on credit.

Receive Your Mortgage Preapproval Letter

When you get preapproved, you usually get a preapproval letter. There are a few reasons the preapproval letter is important. First, real estate agents typically want to see your preapproval letter before they show you houses. This ensures they don’t waste time showing you homes outside your budget.

Second, the preapproval letter is something you can share with the home’s seller when you make an offer. It shows you won’t have problems getting financed for the amount you’re offering.

Understand How Long Preapproval Lasts

Preapproval doesnt last forever. Check your expiration date and keep it in mind as you look at homes. Though it varies from lender to lender, preapproval is typically valid for 60 – 90 days. If you haven't settled on a house, you can request a renewal by giving your lender your most up-to-date financial and credit information.

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Get Preapproved Online

If you’re looking to get approved for a mortgage, Rocket Mortgage® can help. Rocket Mortgage offers a couple of different approval options:

  • Our Prequalified Approval is the fastest way to get approved with Rocket Mortgage. Simply apply online and allow us to check your credit. You won’t be required to provide any documents, but you should come prepared with information about your income and assets. You’ll have the option to sync your application with your bank accounts so we’ll know exactly how much you have available for your down payment and closing costs.
  • Our Verified Approval is a great way to strengthen your offer. To get one, you’ll need to apply with Rocket Mortgage. We’ll do a full verification of your income, assets and credit so sellers can be certain you won’t run into financing issues.

Here’s how it works.

Step 1: Apply And Check Your Credit

Our online application asks you a series of questions to evaluate your eligibility for a home loan. You’ll give us information about yourself, the home you want to buy, your income and your assets. From there, we’ll check your credit so we can offer you accurate mortgage solutions.

Step 2: See And Customize Your Mortgage Solutions

See your recommended mortgage solutions and adjust your numbers to fit your budget. This is where you’ll see how much we can approve you for, as well as recommended types of home loans, down payments, monthly payments and interest rates.

Step 3: Get Your Approval Letter

Once you’ve chosen your mortgage option, you can see if you’re approved for it. From there, we’ll give you a Prequalified Approval Letter that you can use to shop for homes. For an even stronger approval, you can contact a Home Loan Expert to get a Verified Approval.

Mortgage Preapproval FAQs

Why should I get a mortgage preapproval?

If a preapproval doesn’t get you a loan right away, why get one? Preapprovals have several benefits:

  • It’s easier to shop: Many real estate agents require you to get preapproved before you shop for a home. Preapprovals make the house hunting process easier for you and your real estate agent.
  • It makes your offer stronger: If you’re shopping in a competitive housing market or are a first-time home buyer, a preapproval can be crucial to getting your offer accepted. Sellers aren’t just looking for the highest offer. They’re also looking for offers that aren’t likely to fall through. A preapproval tells buyers you can get financed for the amount you’ve offered.
  • It gives you time to sort out issues: There are reasons both home buyers and sellers may need to get to closing fast. Getting preapproved means you’re getting the bulk of the mortgage process done upfront. That way, once you’ve had an offer accepted, you can just focus on getting ready for your move.

How long does preapproval last?

If you’re preapproved, you’ll receive an approval letter offer that lasts for 60 – 90 days depending on the lender. After that, you’ll need to apply again with another credit pull and updated paperwork. If there are any major changes to your financial situation, your preapproval limit might also change.

You can look at a house without preapproval but getting preapproved early in the home buying process is most beneficial. This way, you can find out if there are any issues that could prevent you from getting financing.

What factors are considered for preapproval?

In addition to considering your credit score, lenders will want to verify your employment and income. They’ll also be considering your debt-to-income ratio (DTI), which is a calculation of your total monthly debts, divided by your monthly income. This ratio, expressed as a percentage, helps lenders make sure you have enough income to reasonably cover your debts.

The exact DTI needed for mortgage approval varies by loan type. But generally speaking, you’ll want your debt-to-income ratio to be 50% or lower.

Why should I get preapproved by more than one lender?

Shopping around for a mortgage by applying to multiple lenders helps home buyers compare interest rates and fees and choose the deal with the most favorable terms. Finding a mortgage that best fits your financial standing can save you a lot of money over the life of the loan.

Does getting multiple preapprovals hurt your credit score?

Each time you apply for a loan approval, a lender checks your credit with a “hard pull,” which typically lowers your score by a few points. However as stated by FICO®, your credit score generally won’t get hurt if you make all your inquiries on a home loan within a 30 – 45-day period.

Can you get denied a mortgage after being preapproved?

Yes, it is possible for a buyer’s mortgage to be denied after preapproval. This could happen because of an issue with the appraisal or guideline changes made by the lender.

But in most cases, getting denied is due to the buyer’s financial standing being negatively impacted such as with a change of employment, a decrease in credit score or accrued debt. It’s important to not make any mistakes or drastic changes until after closing on your home.

The Bottom Line: Start Your Home Buying Journey With A Mortgage Preapproval

A preapproval is a great first step toward buying a home. Once your financial information is verified, you'll have a clear idea of how much home you can afford. Getting preapproved before you start your house hunt benefits everyone involved.

To get started, apply online now with Rocket Mortgage.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

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.