How to Get Prequalified for a Mortgage

Co-authored by Ryan Baril

Last Updated: January 31, 2023 References

Prequalification is a necessary part of the mortgage application process. To get prequalified, you supply the lender with financial information, and the lender calculates how much you can borrow. After you are prequalified, you’ll have a better idea of how much home you can afford. Unfortunately, prequalification is based on a cursory review of your financial information. You should follow prequalification by getting pre-approved for a mortgage, which requires a more in-depth analysis.

Part 1

Part 1 of 3:

Gathering Information

You’ll need to give the lender information about your income before you can be prequalified, especially your gross income before taxes. This is what lenders use. Accordingly, add up all of your income for the year. Look at your most recent W-2 form and your pay stubs.^{[1]
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2
Add up your debts. As part of the prequalification process, you also need to provide information about your monthly debt expenses.^{[2]
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Research source} Identify all of your debts, including the following:
- Credit cards
- Student loans
- Auto loans
- Mortgage loans
- Other debts
- Don’t include monthly expenses such as rent, utilities, cell phone costs, and etc.
3
Identify the value of your assets. A lender considers the value of your financial assets and will also want to know how much cash are willing to budget for a down payment, closing costs, and escrows. Estimate how much you have in the following:^{[3]
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- Savings account
- Checking account
- Stocks
- Bonds
- IRAs
- CDs
- Other real estate holdings
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Part 2

Part 2 of 3:

Supplying Information to a Lender

1
Visit lender websites or a bank. It’s very easy to get prequalified for a loan. Large banks will let you start the prequalification process online. Type in the name of any bank and “mortgage prequalification” into Google.
- At the website, you’ll find a phone number or a link you can click to get started. You can also be prequalified by stopping into a bank and asking to speak to a loan officer.
- Don’t limit yourself to banks, though. You can also try lenders, brokers, and credit unions, among others.
2
Provide information. The lender will ask for basic information, such as your name, phone number, and current address. You will also be asked how much you want to finance. Some lenders will then follow up with you for information about your income, assets, and debts.^{[4]
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- Other banks will have you submit all of this information online.
3
Receive your results. The prequalification process is very simple. Based on the information you provide, the lender will tell you how much you can borrow. Realize that the lender isn’t making a promise to lend this amount, or to even to lend to you at all.^{[5]
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- While prequalification usually gives you a loan amount, keep in mind that this is actually for a certain monthly payment. Keep that in mind when shopping toward the upper limit of your prequalification, as taxes and insurance vary for every property and could make you qualify for less or more than your prequalification letter.
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Part 3

Part 3 of 3:

Getting Pre-Approved

1
Get pre-approved to speed up the buying process. Prequalification is helpful because it gives you a general sense of what you can borrow. However, the lender doesn’t verify any of the information you give them, so you really don’t know what you can borrow.
- By contrast, getting pre-approved requires a more in-depth review of your finances. For this reasons, sellers will be more interested in finding out whether you have been pre-approved, not prequalified.^{[6]
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- With pre-approval, you may also be able to move more quickly to close on a home once you find one you want to buy.^{[7]
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2
Check your credit score. A lender will pull your credit score as part of the pre-approval process, if it wasn’t already done during your prequalification.^{[8]
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Research source} Check it before applying for pre-approval. You can find your credit score in the following places:^{[9]
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Trustworthy Source

US Consumer Financial Protection Bureau
U.S. government agency for protecting consumers in the financial sector

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- Look on your credit card statements. Some issuers will print your credit score on the statement.
- Get the score for free by visiting a housing counselor or credit counselor.
- Buy your FICO score form myfico.com. It costs around $20.
3
Clean up your credit history. You should also get a free copy of your credit report and look for errors that might be holding down your credit score. Check for the following common mistakes and dispute them with the credit reporting bureau:^{[10]
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Trustworthy Source

US Consumer Financial Protection Bureau
U.S. government agency for protecting consumers in the financial sector

Go to source}
- Accounts wrongly listed as past due or in collections.
- Accounts that belong to someone with a similar name or Social Security Number.
- Accounts that belong to your ex-spouse.
- Incorrect credit limit. You might have a $35,000 credit limit on a credit card, but your credit report lists the limit as $3,500. This can skew your utilization rate and pull down your credit score.
- Incorrect balance. For example, you might only have $1,000 on a credit card, but your credit report lists a $10,000 balance.
4
Find required documents. You don’t need to submit documents to a lender to be prequalified, but you will if you want to get pre-approved. Accordingly, gather supporting documents, such as the following:^{[11]
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- Paycheck stubs (last 30 days)
- W-2 or I-9 forms (past two years)
- Bank account statements (last two months)
- Asset statements (last two months)
- List of real estate holdings
5
Complete a mortgage application. Get the ball rolling by asking a lender that has prequalified you for a mortgage application so you can be pre-approved. Each application is different, but they generally will ask for information about the property you are looking to buy and your financial background.^{[12]
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- You can get pre-approved without having a specific property in mind. In this situation, leave information about the property blank.^{[13]
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- Your pre-approval is only good for 60-90 days, so time your application accordingly.^{[14]
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Pay your application fee. Unlike prequalification, pre-approval isn’t always free. Instead, you may have to pay an application fee.^{[15]
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Research source} Some banks charge around $20, but others might be willing to waive the application fee. Be sure to ask. ^{[16]
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- Nowadays, many reputable lenders don’t charge an application fee. Keep this in mind when shopping around.
7
Analyze your conditional commitment. If approved, you should receive a conditional commitment letter. Read the letter closely, because it will contain important information about how much you can borrow.^{[17]
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- Even this commitment is conditional. A lender doesn’t agree to lend to you until they perform due diligence on the house you intend to purchase.^{[19]
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