Get Pre-Qualified for a Loan


Unless your planning to pay with cash, getting pre-qualified is an important step in the home buying process and it’s generally fairly simple.

You start by providing a financial institution or mortgage broker with a picture of your overall financial situation, including your employment history, income, assets, expenses and liabilities. After evaluating this information, the lender can give you a pretty good idea of the size mortgage (amount you can borrow) for which you may obtain.

Pre-qualification can often be done over the phone or on the internet and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

Because it’s a quick procedure and based only on the information you provide to the lender, your pre-qualified amount is not a sure thing.  It’s just the amount for which you might expect to be approved and the more thorough approval process.

The next step is to get pre-approved. Here’s a list of commonly requested information most lenders require:

  • Last two months of statements for all asset accounts (savings, retirement, brokerage, and checking if you keep a lot of money there)
  • Last two years’ W-2 Forms
  • Last two years’ tax returns
  • Most recent month’s pay stubs
  • If you’re self-employed, a year-to-date profit and loss statement
  • 1099s for the last two years
  • Copy of driver’s license
  • Copy of Social Security card


Getting pre-approved means that not only have you given the mortgage lender information on your income, assets, and liabilities, but your information has been checked and verified. The mortgage lender may also have pulled your credit report to learn about your credit history and credit-worthiness.

After this is done, the lender will be able to tell you the specific mortgage amount for which you are approved. You’ll also have a better idea of the interest rate you can expect and, in some cases, be able to lock-in that specific rate.

Getting pre-approved for a mortgage enables you to move quickly when you find the perfect place. When you make an offer, it won’t be contingent on financing which will save you valuable time. In a competitive market, this lets the seller know that your offer is serious and may prevent you from losing out to another potential buyers who already have financing arranged.

Once you’ve found the right property, you’ll fill in the appropriate details and your pre-approval can become a complete application.

Best Practices

Be extremely cautious with pre-qualification and pre-approval processes – they are not the same thing.  Do not assume that the bank will provide you with a loan until you have gone through all the steps necessary for full approval. The mistake could cost you your new home! Once you have a written pre-approval letter in hand, you’re ready for the fun part – home shopping!