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Getting Pre-approved


What You'll Learn

  • The first step in getting pre-approved is completing the loan application form provided by your lender
  • Getting pre-approved allows you to search for homes with the confidence of knowing what you can afford
  • Your lender will evaluate your four C’s when determining your qualification

It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting.  Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.

To get pre-approved, you’ll complete your lender’s loan application, providing them with important information about your credit, debt, work history, down payment, and residential history. This information helps your lender evaluate your 4 C’s to determine how much you may be qualified to borrow:

  • Capacity:  Your current and future ability to make your payments
  • Capital or cash reserves:  The money, savings and investments you have that can be sold quickly for cash
  • Collateral: The home, or type of home, that you would like to purchase
  • Credit: Your history of paying bills and other debts on time

If your lender determines that you qualify for a loan, they’ll provide you with a pre-approval letter outlining the maximum amount you are qualified to borrow. Keep in mind that the amount your lender is willing to lend is not how much you should borrow.  You should only borrow what is comfortable for you, making sure not to overextend yourself.

Now that you know how much home you can afford, you can begin looking for your new home with greater confidence. Talk with your lender about how long your letter will remain valid.


Key Takeaways

  1. Getting a pre-approval is strongly recommended if you are a serious home buyer

  2. Your credit will play an important role in getting pre-approved – and approved

  3. Your pre-approval letter will expire after a certain amount of time; be sure to discuss this with your lender

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