🏡 Why Getting a Mortgage Pre-Approval Should Be Your First Step When Buying a Home:

 

 

 

When many people begin the process of buying a home in the U.S., they often start by visiting open houses or browsing listings online. However, before looking at homes, there’s a much more important step:

👉 Getting a mortgage pre-approval.

 

 

 

 

📑What is a Mortgage Pre-Approval?

 

A pre-approval is an evaluation by a lender or mortgage broker that determines how much you may be able to borrow based on your credit score, income, assets, and debts.  While it’s not a full loan approval, it provides a clear indication of your purchasing power and comes with a letter showing your estimated loan amount and terms.

 

 

🏠Why is Pre-Approval the First and Most Important Step?

 

 

1. 💰 Set a Realistic Budget

A pre-approval helps you understand exactly how much you can afford, so you can focus on homes within your true price range.  Without this, you might waste time on homes that are too expensive—or miss opportunities on ones you can actually afford.

 

2. 🏠 Stronger Negotiation Power

Sellers and real estate agents take buyers more seriously when they include a pre-approval letter with their offer.  Without it, your offer might be rejected or considered less competitive.

 

3. ⏳ Act Quickly in a Competitive Market

With a pre-approval in hand, you’ll be ready to submit an offer immediately once you find the right home.  Delaying this step could mean losing the home to another buyer.

 

4. 📑 Identify Issues Early

During the pre-approval process, any potential issues—such as credit problems or missing documentation—can be identified and addressed in advance, avoiding surprises later on.

 

 

📌In Conclusion:

 

Before meeting with a real estate agent or attending open houses, getting a mortgage pre-approval is the smartest first step.  It gives you clarity, confidence, and a competitive edge in today’s fast-moving housing market.

 

 

 

 

✅ What You Need for a Mortgage Pre-Approval:

 

To get a mortgage pre-approval in the U.S., lenders will require specific documents and information to evaluate your creditworthiness, income stability, and debt-to-income ratio. Here’s a checklist to help you prepare:

 

 

 

1. 🪪 Personal Information

• • • • • • Valid government-issued ID (e.g., driver’s license or passport)

          • Social Security Number (SSN)

          • Residential history (usually for the past 2 years)

 

2. 💼 Income Documentation

 

For Salaried Employees (W-2):

• • • • • • • • W-2 forms from the past 2 years

              • Recent pay stubs (typically covering the last 30 days)

For Self-Employed or 1099 Contractors:

• • • • • • • • Personal and business tax returns (usually last 2 years)

              • Profit & Loss (P&L) statement

              • Recent bank statements showing business income deposits

 

 

3. 💳 Credit Information

• • • • • • The lender will perform a tri-merge credit check (Experian, Equifax, TransUnion)

          • Your credit score plays a key role in loan qualification and interest rates

 

 

4. 🏦 Asset Verification

 

• • • • • • Bank statements (checking and savings) from the past 2 months

          • Proof of down payment funds and source of funds

          • Statements from investment accounts (401k, IRA, stocks, etc.), if applicable

 

 

5. 💸 Current Debt Information

 

• • • • • • • Monthly payments on:

              • • • Credit cards

                  • Auto loans or leases

                  • Student loans

                  • Personal loans

            • Any other recurring obligations

 

 

 

📌 Additional Tips:

 

• • • • • • • If you’re applying with a co-borrower, their documents will be required as well

            • Some lenders may request additional documents such as lease agreements or job offer letters

            • Pre-approvals are typically valid for 30 to 90 days

            • Avoid large or unexplained deposits, as they can delay the process

 

 

 

 

 

 

Terry Kwon

Contact: (631) 624-4480

Email: terry@milestonepointinc.com

 

Funding Director at Milestone Point, Inc.

Licensed Mortgage Originator at Loan Factory

NMLS #2620208

Loan Factory NMLS #320841