You’re finally ready to make the switch from renting to owning – but now what? Sometimes, the hardest part of buying isn’t finding the right home. It’s knowing what you can afford. Fortunately, a mortgage pre-approval can remove a lot of the guesswork and give you a clear starting point before you start looking.

What is a mortgage pre-approval and why is it important?

If it’s your first time buying, you might think the process involves talking to a real estate agent first, finding a house and then calling a lender. But while you can do it that way, it’s often better to know what you can afford before looking at properties. That’s why a pre-approval matters.

It gives you a clear budget, so that you can shop with confidence and present yourself as a serious buyer. In fact, some agents won’t even show homes until you’re pre-approved. And in a competitive market, having a pre-approval letter can put you ahead of another buyer who hasn’t taken that step yet.

What will my loan officer need for a pre-approval?

Before getting into what you’ll need, it’s important to understand that a pre-approval is different from a pre-qualification.

A pre-qualification is usually a quick estimate based on information you provide – like your income, debts and maybe a soft look at your credit. It’s more of a snapshot.

A pre-approval, on the other hand, is much more detailed and carries more weight.

When you apply for a pre-approval with FirstBank, we take a deeper look at your full financial picture. This includes verifying your income (not just taking your word for it).

You’ll typically need recent pay stubs, W-2s (usually from the last two years) and possibly tax returns if you’re self-employed or have additional income. We’ll also review bank statements to confirm you have enough saved for your down payment and closing costs.

Your credit report is pulled as well for information regarding payment history, current debt and overall patterns. If you’re using gift funds for part of your down payment, you’ll likely need a gift letter and documentation showing where the funds came from.

How long does a pre-approval last?

One of the good things about a pre-approval is that the process doesn’t take long. In many cases, once you submit all your documents, you can get an answer within a few days.

Most pre-approvals are good for about 60 to 90 days. For that reason, it’s best to apply once you’re ready to actively start house hunting. You don’t want it to expire before you’ve found a place.

Does a pre-approval lock-in my rate?

A mortgage pre-approval doesn’t automatically lock in your interest rate. Rates can fluctuate daily based on the market, so what you’re quoted today could change tomorrow.

Once you’re under contract on a home, you’ll usually have the option to lock in your rate for a set period of time. Locking your rate protects you from increases while your loan is being finalized, which can provide peace of mind and help you plan your monthly payments.

Any misconceptions around pre-approvals

Keep in mind that a pre-approval doesn’t guarantee closing. It’s a conditional approval based on the information you provided at the time. However, as long as the information is accurate (and nothing major changes with your income, employment, credit or debt), you should be fine.

This isn’t the time to switch jobs, finance a car, run up credit cards or make large unexplained deposits. You’ll also need to make sure the money for your down payment and closing costs is still there and properly documented.

Bottom line: If you want to make the home buying process as seamless as possible, a pre-approval can make a difference. Reach out to the loan experts at FirstBank to take this first step toward owning.