How to Get Pre-Approved for a Mortgage Loan: A Simple Guide
Buying a home is an exciting journey, but before you start touring houses, there's one important step you should take: getting pre-approved for a mortgage loan. A mortgage pre-approval helps you understand how much you can afford, shows sellers you're serious, and gives you a head start in the home buying process.
In this blog, we’ll walk you through what mortgage pre-approval is, why it matters, and how to get pre-approved—step by step.
What is a Mortgage Pre-Approval?
A mortgage pre-approval is a letter from a lender that states how much money you’re qualified to borrow to buy a home. It’s based on your financial background—your income, credit score, debt, and assets.
It’s not a final approval, but it’s an important first step. Think of it as getting a green light to start house hunting with a clear budget in mind.
Why is Pre-Approval Important?
Here are a few reasons why getting pre-approved makes sense:
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Sets Your Budget: You'll know how much you can afford before you fall in love with a home outside your range.
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Boosts Credibility: Sellers are more likely to take your offer seriously if you're pre-approved.
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Saves Time: You can focus only on homes within your price range.
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Speeds Up Closing: Lenders have already checked your documents, so final approval may be faster.
Steps to Get Pre-Approved for a Mortgage
Now that you know why it’s important, let’s go over the steps to get pre-approved:
1. Check Your Credit Score
Before applying for pre-approval, it’s a good idea to check your credit score. Lenders use it to decide if you're a trustworthy borrower and what interest rate to offer.
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A score of 620 or higher is typically needed for most loans.
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A 740+ score may help you qualify for better rates.
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You can check your credit report for free at sites like AnnualCreditReport.com.
If your score is low, consider paying down debts or correcting any errors before applying.
2. Gather Your Financial Documents
To get pre-approved, you'll need to provide proof of your financial situation. Most lenders will ask for:
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Proof of income: Pay stubs (last 30 days), W-2s (last 2 years), or tax returns (for self-employed).
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Bank statements: Last 2-3 months showing savings and checking balances.
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Proof of assets: Investments, retirement accounts, etc.
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ID and Social Security number
Having these ready will speed up the process.
3. Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio compares how much you owe each month to how much you earn. It helps lenders decide if you can manage a mortgage payment.
Example: If you earn ₹50,000 per month and pay ₹20,000 toward debt, your DTI is 40%.
Most lenders prefer a DTI of 43% or lower.
4. Choose a Lender and Apply
Once you’ve reviewed your credit and gathered documents, it’s time to shop around for lenders. Don’t just go with the first bank—compare rates and offers.
You can apply for pre-approval online or in person. The lender will run a hard credit check, review your documents, and issue a pre-approval letter if you qualify.
Tip: Get quotes from 2-3 lenders to find the best deal.
5. Receive Your Pre-Approval Letter
If everything checks out, your lender will give you a pre-approval letter. It will state:
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The loan amount you qualify for
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The estimated interest rate
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The type of loan (e.g., FHA, conventional)
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How long the pre-approval is valid (usually 60–90 days)
This letter shows sellers that you're ready to buy and can afford the home you’re offering on.
What Happens After Pre-Approval?
Once you’re pre-approved, you can:
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Start house hunting with confidence.
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Make stronger offers on homes.
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Move faster through the mortgage process when your offer is accepted.
Remember: being pre-approved doesn’t guarantee final loan approval. You still need to:
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Avoid making large purchases or taking new loans.
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Keep your job and income steady.
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Continue paying bills on time.
Common Mistakes to Avoid
Here are a few things that can hurt your pre-approval or cause problems later:
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Making big purchases (like a new car) during the home-buying process.
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Quitting your job or switching industries.
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Missing payments on credit cards or loans.
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Opening new credit accounts before closing on the home.
Final Thoughts
Getting pre-approved for a mortgage is one of the smartest things you can do before buying a home. It helps you understand what you can afford, shows sellers you’re serious, and gives you a clear path forward.
By checking your credit, gathering documents, and comparing lenders, you’ll be well on your way to homeownership.
So before you browse listings or schedule showings, take this important step—and shop smart with confidence.
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