The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
Before you set out to find a home, you need to know how much you can afford and that you’re able to get a mortgage to make it happen. To do that, you need a mortgage lender to preapprove you for the loan. Here’s a checklist of what you need to get a mortgage preapproval letter.
Documents for mortgage preapproval
Employment and income
The following information is needed for all borrowers signing the loan:
- Pay stubs from at least the past 30 days
- Tax returns (including W-2s) from the past two years
- Bank statements from the past two months to three months – Checking, savings, money market accounts
- Employment information – Contact information of employers in the past two years (some employers have an employment verification phone number lenders can call)
- Business records if self-employed
- Other income sources – Bonuses, child and/or spousal support, disability or VA benefits, pension, Social Security or other sources
- Account statements from the past two months to three months – 401(k)s and/or IRAs, CDs, mutual funds or other investment or retirement vehicles
- Down payment gift letter if applicable
- Information on other real estate if you have multiple properties
- Loan statements from the past 60 days – Auto loans, credit cards, personal loans, student loans
- Credit reports and scores retrieved by the lender lender with your authorization
- Rental history – Contact information for landlords and proof of rent payments, such as canceled checks or paid receipts
- Driver’s license, Social Security card or other form of ID
- Recent residences and tenure at each
Mortgage preapproval FAQ
If you’re prepared with all of your documents and eligible for the loan, many mortgage lenders can issue a same-day preapproval, or at most within a few days.
A mortgage preapproval typically expires after 90 days. Some lenders have shorter windows of 30 days or 60 days, and others longer, up to 120 days. If you chose to lock in your mortgage interest rate, this usually aligns with your rate-lock period. If you haven’t found a home within that time frame, it’s possible to easily get a new preapproval, provided your credit and financial picture hasn’t changed since you first got preapproved.
Your credit score could drop slightly when you get preapproved because the mortgage lender checks your credit report. This decrease is only temporary. If you’re obtaining preapprovals from more than one lender, you can limit the impact to your score by getting them all within a 45-day window.
A mortgage prequalification can help give you an idea of your homebuying budget based on basic information you provide, and it might or might not involve a credit pull. A prequalification isn’t an indication that the lender is prepared to provide you with financing, however, so it won’t be useful when you make an offer on a home. A preapproval, on the other hand, means that the lender has done a preliminary evaluation of your finances and is willing to give you a loan for a certain amount. Still, a preapproval is not a firm commitment. The loan won’t be cleared to close until the home appraises and the lender satisfactorily completes underwriting.
When you make an offer on a home, you need to include a preapproval letter from a mortgage lender to show the seller you’re a legitimate buyer with financing. A preapproval also helps save time when you’re ready to formally apply for the loan, because much of the information-gathering has already been completed. That’s why it’s best to only get a preapproval from the lender (or lenders) you ultimately want to work with.