Pre-Approval Essentials: What to Know Before You Start Touring Homes
Buying a home is one of the most exciting milestones you’ll ever experience — but before you start scrolling through listings or booking showings, there’s one crucial step that can make or break your homebuying journey: getting pre-approved.
Think of pre-approval as your “green light” — it tells sellers you’re serious, helps you shop smarter, and can even give you a competitive edge in a busy market. Here’s what you need to know before you fall in love with a property.
1. Understand What Pre-Approval Really Means
Pre-approval is more than a quick online calculator or a casual conversation with a lender. It’s a thorough review of your financial picture — including income, credit score, debt, and employment history — to determine how much a bank is willing to lend you.
Why it matters:
- It gives you a realistic budget so you’re only touring homes you can afford.
- It shows sellers you’re a qualified buyer, which strengthens your offer.
- It helps you act quickly when the right home hits the market.
2. Gather Your Documents Early
To speed up the process, have these documents ready:
- Recent pay stubs and W-2s
- Tax returns (usually last 2 years)
- Bank statements
- ID and employment verification
Being prepared not only streamlines your pre-approval but also signals to your lender — and future sellers — that you’re organized and ready to move.
3. Know Your Numbers — and What Impacts Them
Your credit score and debt-to-income ratio (DTI) are two major factors lenders consider. Even a slight bump in your credit score can lower your interest rate and increase your buying power. Before applying:
- Pay down high-interest debt
- Avoid new credit accounts
- Double-check your credit report for errors
4. Lock In Your Strategy Before You Shop
Pre-approval usually lasts 60–90 days. Once you’re approved, partner with a real estate advisor to align your home search with your budget, neighborhood goals, and lifestyle priorities.
Pro tip: In competitive markets, having a pre-approval letter can help your offer rise to the top — sometimes even over higher offers without one.
Bottom Line:
Getting pre-approved isn’t just a formality — it’s the foundation of a successful homebuying strategy. With your finances in order and your approval letter in hand, you’ll walk into every showing with confidence and clarity, ready to make your dream home a reality.