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After being in the mortgage industry since 2009, the biggest lesson I’ve learned is that pre-approval is the first and most important step in the homebuying process.
Many buyers start by browsing homes online. It feels productive and exciting. However, they get their hopes up only to find out they can’t afford that 5,000 square foot lakeside home. Which is why getting pre-approved is so important. A true pre-approval is a personalized financial review that determines what is actually affordable for you.
What Does a Real Pre-Approval Look Like?
Instead of a checklist, I believe every pre-approval should start with a conversation. Every borrower’s situation is different. Depending on your lifestyle, goals, and finances, what a Loan Officer needs from you may vary.
For example:
- A self-employed borrower will provide different types of documents than a W-2 wage earner.
- The length of time someone has been self-employed can change what is required too.
In today’s market, a knowledgeable Loan Officer does more than issue a pre-approval letter. They provide education, strategic guidance, and help you structure financing that aligns with both your budget and your future plans.
After 16 years in this industry, here’s what I tell buyers:
If I’m okay at my job, I’ll pre-approve you.
If I’m great at my job, you’ll pre-approve yourself.
How Can I Get Pre-Approved Fast?
If you want a fast and smooth pre-approval, focus on these four things:
- Come in with an open mind and be ready to learn
- Be honest with your Loan Officer
- Provide accurate and complete information
- Ask questions
The more honest and forthcoming you are, the quicker a Loan Officer can help you figure out what options work for you.
How Long Does a Mortgage Pre-Approval Last?
Most pre-approvals are valid for 60 to 90 days, depending on the lender and the program.
Even if you are not ready to buy immediately, getting pre-approved early gives you a starting point. It helps you understand where you stand and what adjustments, if any, need to be made before you purchase a home.
How Can I Determine How Much Home I Can Afford?
Just because you are pre-approved for a certain amount does not mean you should max it out. A pre-approval tells you the maximum you can borrow. It does not mean that number is the most comfortable or responsible choice for your lifestyle.
It also does not mean you receive any unused portion of that amount. It simply establishes your borrowing ceiling.
To determine what is affordable for you, consider the following three factors.
- Cash to Close: Understand the full amount you will need at closing. This includes your down payment and closing costs, minus any earnest money already deposited and any seller or lender credits. A helpful way to think about it is this: if you were closing tomorrow, how much would you need to bring, and are those funds readily available?
- Monthly Payment: For most buyers, this is the deciding factor. The key is choosing a payment that feels sustainable for your lifestyle. Review your full monthly budget, including savings goals and everyday expenses, and determine how a mortgage payment fits into the bigger picture of your financial life.
- Interest Rate: While you cannot control where rates are today, you can control your readiness and strategy. Interest rates are influenced by market conditions and individual factors such as your credit score. Also keep in mind that if rates improve in the future, refinancing may be an option. The most important timing factor is whether you are financially and personally prepared to buy. Trying to time the market is not always the answer.
Remember this as You Start the Process.
Tools, like mortgage calculators, are a good starting point, but keep in mind that a true pre-approval with a Loan Officer gives you an added level of clarity. It helps you understand your numbers, set clear boundaries, and move through the process with confidence and peace of mind.
Ready to get the pre-approval process started? I am here to help.
