The process seems invasive but it help get the ball rolling and make the process smoother leading up to closing
A preapproval is the next best thing to locking in your loan before you’ve found a home. You’ll fill out a mortgage application, the lender checks your credit, and if all looks good, you’ll get a preapproval letter. This letter shows how much the lender is willing to loan you for 90 days—without making any promises just yet.
What You’ll Need:
- Social Security Number
Lenders use your SSN to check your credit score. It tells them how well you handle debt and flags any issues like missed payments or bankruptcies. - Income and Tax Docs
Pay stubs show how much you’re earning and that you’re employed. Freelancing or side hustles? You’ll need extra proof of income. Your W-2s will also help confirm your earnings and tax withholdings. - Bank Statements and Investments
Lenders want to see that you have cash for the down payment and closing costs, plus a little cushion in case things get tight. - Debts
Your debt-to-income ratio (DTI) shows how much of your income goes toward paying off debts. Lenders use this to decide if you can handle more payments with a mortgage. - Estimated Home Value
Lenders use the home’s listing price to estimate its value and calculate the loan-to-value (LTV) ratio. A lower LTV can get you better rates, while a higher LTV makes things riskier for both you and the lender.
Heads Up: Expect Questions!
Lenders will dive deep into your finances—so be ready to explain anything, like why you paid your Cyber Truck loan with a credit card.
