Are You Pre-Approval Ready?

Taking the first step toward homeownership often begins with a prequalification, which helps determine if a lender should move forward with a pre-approval. The three key ingredients are income, assets, and credit. Lenders need to ensure that your income is stable and sufficient to afford monthly payments, discuss your assets to confirm you can cover down payments and closing costs, and assess your credit to gauge your financial responsibility. Having a conversation about these components with a potential buyer is essential to building a clear path toward pre-approval and, ultimately, making homeownership a reality!

3-Key Ingredients

Income

Your income plays a crucial role in determining how much house you can afford. Lenders will review your monthly income, employment stability, and history, as well as any additional income sources such as side gigs or bonuses. To demonstrate financial consistency, it’s helpful to gather your most recent pay stubs, W-2s, or tax returns in preparation for the pre-approval process.

Assets

Your assets demonstrate your ability to cover essential home-buying expenses, such as the down payment and closing costs. Lenders typically review bank statements to verify your savings or checking balances and may also request documentation of other financial resources, such as a 401(k), pension or retirement funds, stocks or bonds, IRAs, Roth accounts, or even gift funds. These assets provide confidence in your financial readiness. A helpful guideline is to have at least 2%–5% of the home’s purchase price saved, though there are options available for lower down payments.

Credit

Your credit score plays a crucial role in qualifying for a mortgage and determining your interest rate. Lenders evaluate your current credit score, payment history, credit usage, and the age of your accounts to assess your creditworthiness. The good news? We can work with buyers who have credit scores as low as 580! If you're unsure of your credit standing, we’re here to help you assess and improve it.

Start Your Prequalification Today!

Now that you know the key ingredients for pre-approval, take the next step by filling out our online Prequalification Form. It’s quick, easy, and helps us determine how close you are to making your homeownership dreams a reality.

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