A pre-approval is a lender's written statement, based on your verified credit, income and assets, of how much you can borrow. It tells you your real price range and shows sellers that your offer is backed by a lender's review.
Quote vs. pre-approval
- A quote is an estimate based on what you tell us. It takes minutes and does not require a hard credit pull. Start one here.
- A pre-approval adds a credit report and a review of your pay stubs, W-2s or tax returns, and bank statements. It usually takes a day or two once we have your documents, and it comes with a letter you can submit with an offer.
Why get pre-approved before you shop
- You know your true budget, including the monthly payment with taxes and insurance.
- Most listing agents will not present an offer without a pre-approval letter.
- Problems on a credit report surface early, while there is still time to fix them.
- Once you are under contract, much of the work is already done, which shortens the time to closing.
What a pre-approval is not
It is not a loan commitment. Final approval depends on the property, the appraisal, and the lender's underwriting of your complete file. Pre-approval letters are typically valid for 60 to 90 days and can be refreshed.
What to have ready
Identification, 30 days of pay stubs, two years of W-2s or tax returns, and two months of bank statements. The full list is on the documents checklist.