How to Get a Mortgage Preapproval Letter


The home buying process involves many steps, but it always starts with getting preapproved for a mortgage. A mortgage preapproval letter shows that a lender has checked your credit report and approved you to take out a mortgage.

It can be tempting to skip over the mortgage preapproval process and go straight to looking at potential homes, but this is almost always a mistake. Getting preapproved will ensure that real estate agents and home sellers know you’re a serious buyer. It will also give you more room to negotiate on your offer.

Plus, getting preapproved gives you a better idea of what kind of home you can afford to buy. Let’s look more closely at what mortgage preapproval is and how you can get started.

Why You Should Get a Mortgage Preapproval Letter

If you’re preapproved for a mortgage loan, this means that a mortgage lender has done a credit check, reviewed your income and assets, and determined that you’re eligible to buy a home.

You’ll receive a preapproval letter outlining the loan amount you’re approved to borrow and what your interest rate may be. Getting preapproved is important for several reasons.

For one thing, getting preapproved alerts you to any potential problems with your credit or income. Many people have issues with their credit that they need to clear up before obtaining a mortgage will be possible.

Be Prepared

If you know about these problems, you can take the necessary steps to clean up your credit first. That way, you can go into the home buying process knowing that all of those issues are resolved. It’s much harder if you go house hunting first, find a home you love, and then realize you’re not prepared to buy it just yet.

For that reason, getting preapproved will help you be taken more seriously by sellers and listing agents. Sellers want to accept an offer that they are reasonably certain will end up going through.

Getting preapproved assures them that you’re in a position to be able to close on the home. This is especially important in a seller’s market where there could be multiple offers on one home.

And finally, getting preapproved for a mortgage gives you more clarity when you start looking at different homes. Without a preapproval letter, you’re really just guessing when it comes to the type of home you think you can afford. Getting preapproved takes all the guesswork out of it.

Preapproval vs. Prequalification

Many people use the terms preapproval and prequalification interchangeably, but they are two different things. Getting prequalified is similar to preapproval, but it’s not quite as accurate or thorough.

When you get prequalified for a mortgage, your lender won’t pull your credit and won’t ask for as much financial information. This obviously makes it much less time-intensive for you, but it also means that the information you receive is an estimate that could change.

In comparison, when you get preapproved, your lender will check your credit and do a more thorough examination of your financial situation. Because this process is much more comprehensive, you’ll receive a more accurate estimate of how much you’re approved to borrow.

What Documents Do You Need for Preapproval?

Your mortgage lender will require a lot of documentation before they’re willing to preapprove you for a mortgage. This can make the preapproval process more tedious.

But the good news is, you already have access to all the information needed. So, it’s really just a matter of gathering all the necessary paperwork to submit to your lender.

Here is an overview of the documents and information you’ll need to get preapproved:

  • A good credit score: Unless you’re applying for an FHA loan or VA loan, you’re going to need a good credit score to get preapproved for a mortgage. Most mortgage lenders require a minimum credit score of 620 to qualify. However, you’ll receive the lowest interest rate if your credit score is 760 or higher.
  • Employment history: Your mortgage lender will want to see proof of employment before they’ll be willing to preapprove you for a mortgage. You’ll need to provide copies of your tax returns as well as your annual W-2. Your lender may even contact your employer to verify your employment status and income.
  • Proof of assets: You’ll also need to provide evidence that you can afford to pay the down payment and closing costs on your new home. This can typically be done by providing pay stubs, tax returns, or bank statements. If you aren’t able to pay the standard 20% down payment, you must purchase private mortgage insurance (PMI).
  • Your debt-to-income ratio: Debt-to-income ratio (DTI) is the percentage of gross monthly income that goes toward debt payments, such as credit cards, auto loans, and student loans. You must let your lender know of your monthly debts, since this will affect your debt-to-income ratio. You can provide a list with all of your outstanding debt, as well as the loan balance and minimum monthly payments.
  • Additional documents: Your lender will likely want additional information, like your Social Security Number and your driver’s license. And if you’ve been through a divorce or owe alimony payments, you’ll need to provide documentation of that as well.

How to Get Preapproved for Your Mortgage

Hopefully, by this point, you understand what mortgage preapproval is and why it’s so important. Here are the five steps you’ll need to take to get preapproved for your mortgage.

1. Check your credit report

Before you even begin the mortgage preapproval process, it’s a good idea to request a copy of your credit report from the three major credit bureaus. You can receive your free annual copies at

That way, you’ll go into the preapproval process already knowing where you stand when it comes to your credit history. And this will give you a chance to review your credit report for any errors or delinquent accounts. It’s a good idea to resolve these issues before applying for mortgage preapproval.

2. Gather the necessary documentation

Take the time to gather the necessary paperwork before you approach your lender. This ensures that you go into the mortgage process prepared, and will help things move along much more smoothly.

3. Submit your application

Now it’s time to apply for preapproval. Many mortgage lenders make it easy to apply for preapproval online. Answer all the questions as accurately as you can, and submit all the necessary paperwork.

It may be a good idea to apply for preapproval with multiple lenders. This will allow you to compare your options and get the most favorable terms possible.

4. Receive your offers

Once your lender has reviewed your credit score and financial information, you’ll receive several recommended mortgage options. At this point, you’ll see how much you’ve been approved for and your recommended loan types. You’ll also get an idea of what your estimated monthly mortgage payment and interest rate might be.

5. Receive your preapproval letter

Once you’ve chosen your mortgage option, your lender will send you a preapproval letter. You can take this letter with you as you begin shopping for your home.

Bottom Line

Applying for mortgage preapproval is probably the least exciting part of the home buying process, but it’s an important first step every new homebuyer should take. Getting preapproved will let you know what kind of home you can afford, and it will give you an advantage when you’re negotiating with sellers.

However, keep in mind that a mortgage preapproval is not a guarantee. If you suddenly lose your job or your financial situation unexpectedly changes, then the previous offer will no longer stand. But it’s as close to a guarantee as you can get before finally closing on your home.


Why does it matter if I receive a preapproval letter?

It’s essential to get preapproved for your mortgage for a couple of reasons. First, it gives you a realistic picture of the type of house you can afford. And sellers will take your offer more seriously if you’ve already been preapproved for a mortgage.

What is the difference between a mortgage prequalification and preapproval?

Getting prequalified for a mortgage is much less thorough than the preapproval process. Your lender won’t run a credit check, and they won’t review your finances as carefully. This makes it much less accurate than receiving a preapproval letter.

If you go through the process to get preapproved, then it’s likely you’ll be able to close on a home, unless something drastic happens. But if you’ve only been prequalified, your offer could change once the lender does a more in-depth credit check and financial review.

When should I get preapproved?

You should apply for mortgage preapproval before you start looking at homes. That way, you’ll know what kind of home you can afford before you start the home buying process.

Will getting preapproved for a mortgage hurt my credit score?

When you get preapproved for a mortgage, your lender does a hard inquiry on your credit report. Typically, this can hurt your credit score slightly. However, multiple hard inquiries for a home loan shouldn’t hurt your credit score.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.