One of the most powerful tools you can have before making an offer on a home is a pre-approval letter from a lender.
What’s the Difference Between Pre-Qualification and Pre-Approval?
- Pre-Qualification
- A quick estimate of what you might qualify for
- Based on basic self-reported financial information
- No credit check or document verification
- Useful for early-stage planning
- Not as strong as pre-approval when submitting offers
- Pre-Approval
- A lender verifies your income, credit, assets, and debt
- Requires more time and documentation
- Results in an official letter showing how much you can borrow
- Shows sellers you’re a serious, qualified buyer
- Can strengthen your offer in a multiple-offer situation
Why Pre-Approval Matters
- Gives you a clear budget—no guessing what you can afford
- Makes your offer stand out to sellers
- Speeds up the final loan process once you’re under contract
- Helps identify any credit issues or paperwork gaps early
What You’ll Need to Provide for Pre-Approval
To get pre-approved, be ready to submit documents such as:
- Proof of income (recent pay stubs, W-2s, or 1099s)
- Employment verification (letter from employer or contact info)
- Credit check authorization
- Bank statements (checking, savings, and other assets)
- List of monthly debt obligations (credit cards, car loans, etc.)
- Tax returns (typically last 2 years)
- Identification (driver’s license, Social Security number)
Tip: Having these ready in advance can speed up your pre-approval and help avoid delays.
