Step 3: Getting Pre-Approved
Pre-approval is your first real step toward buying a home.
A pre-approval is a letter from a lender that shows how much money they’re willing to lend you to buy a home. It’s not a guarantee, but it shows sellers that you’re serious—and gives you a clear budget for your search.
What Lenders Look At
To get pre-approved, a lender will usually ask for:
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Your income (W-2s, pay stubs, or self-employment documents)
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Your debts (credit cards, loans, etc.)
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Your credit report (to check your score and history)
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Your assets (bank accounts or retirement savings)
They use this to calculate something called your debt-to-income ratio, or DTI. That’s a comparison of your monthly debts to your monthly income. Most lenders like to see a DTI below 43%, but some programs allow more.
Soft vs. Hard Credit Checks
Some lenders offer a quick pre-qualification with just a soft credit check. This type of check gives a basic estimate of what you might qualify for and doesn’t affect your credit score. It's a good starting point, but it's not strong enough to make offers on homes.
A hard credit check, on the other hand, is required for a full pre-approval. It provides the lender with access to your full credit history and score from all three credit bureaus (Experian, TransUnion, and Equifax). This helps them better evaluate your ability to repay a loan.
Lenders typically charge a small fee—usually between $30 to $50—to cover the cost of pulling your credit report. This fee may be collected upfront or at the time of application, depending on the lender.
Why is this important? Because sellers and real estate agents want to see a real pre-approval—not just a guess. A hard credit check shows you’re financially serious and gives a more accurate picture of what you qualify for. It can also uncover any issues that you may need to fix before moving forward with your home search.
Why Pre-Approval Matters
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You'll know how much home you can afford
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It shows real estate agents and sellers you're serious
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It makes your offer stronger in competitive markets
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It helps avoid surprises later in the loan process
How Long Does it Take?
Most online applications take just 10–20 minutes. You’ll usually get your letter within 1–2 business days. Some lenders offer same-day approvals.
Tips for the Pre-Approval Process
Here are five key tips to help you get the most out of the pre-approval process:
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Check your credit before applying – Review your credit report for errors or issues. Disputing a mistake early can improve your score and loan options.
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Organize your documents – Have your W-2s, recent pay stubs, bank statements, and tax returns ready. This makes the process smoother and faster.
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Avoid big financial changes – Don’t switch jobs, buy a car, or take on new credit cards while getting pre-approved. These changes can affect your credit score or income stability.
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Ask questions about fees – Some lenders charge upfront fees to run a hard credit check. Ask what the fee covers and if it’s refundable if you don’t move forward.
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Shop around for lenders – Getting pre-approved doesn’t mean you’re locked in. You can (and should) get quotes from multiple lenders to compare rates, terms, and service quality
These steps help you put your best foot forward—and avoid surprises later.
Wrapping Up
Getting pre-approved is one of the smartest moves you can make before shopping for a home. It gives you a clear price range, strengthens your offer, and helps you feel more confident when it’s time to act. Whether you're just starting or ready to buy now, this step gives you real numbers to plan with.
If you're ready to take action, you can start your pre-approval now with a trusted lender. It only takes a few minutes to begin.
Next, we’ll break down how much house you can actually afford—and how to choose a price range that fits your lifestyle and budget without stretching too far.