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5 Must-Haves To Get a Mortgage Approval

Interest rates are at all-time lows: 30-year notes have sunk to 2.5% and lower. If you want to grab a rate like that, there are several things you need to do to gain mortgage approval.

Potential buyers ought to cover the five items listed below. If you do, you should be able to get the home loan and home of your dreams!

The Difference Between Pre-Approval And Pre-Qualification

First, it’s essential to understand the difference between these two similar-sounding concepts. A pre-qualification is helpful to estimate how much home you can afford.

In contrast, a pre-approval means the potential lender checks your credit, income, employment, and financials to get you approved for a specific loan amount. Having a pre-approval in hand helps you anticipate which types of homes to check out.

Just as important, real estate agents will know you’re a serious buyer who can close the deal. 

#1 Have Proof of Income

To get approved for a mortgage, you need to show proof of your income. Usually, this means giving the lender your W-2s for the last two years. If you are self-employed, be prepared to show two years of tax returns and a profit-and-loss statement for the year. 

#2 Have Proof of Assets

You also need to share bank and investment account statements that show you have cash for your down payment and closing costs. 

The down payment will vary according to the type of loan you get. Many loans offer their best rates for a 20% down payment, but you can get a loan with less money down. Some mortgages have options for 3%, 3.5%, or 5% down.

Many lenders allow you to get your down payment as a gift. If you want to do that, you’ll need a gift letter from your relative or friend that states the money is a gift, and you don’t need to pay it back. 

#3 Have Good Credit

Most mortgage lenders want to see at least a 620 credit score before they’ll offer a conventional loan approval. You can get approved for an FHA loan with a 580 credit score, but it’s easier with a score that’s above 600. 

If you have a lower credit score, you may have to put more money down. FHA loans offer 3.5% down payments for most borrowers, however. 

#4 Prove You’re Employed

The days of getting a loan with no proof of a job or income are long gone! Lenders want to see that you have a stable income before they pre-approve you.

They will want to see your pay stubs and will probably check your employment status by calling your HR department. If you changed jobs recently, it’s usually not a problem. But the lender may want to contact your current and previous employer to check your job stability. 

Self-employed borrowers will need to show tax returns, bank statements, and a profit-and-loss statement. Some lenders may call some of your clients or customers to verify you have a stable business. 

Generally, the lender wants to see that you have turned a profit in your business for at least two years. 

#5 Show Other Documentation

The mortgage company also will want your Social Security number and driver’s license so they can get your credit report. Also, be prepared to provide other documentation the lender might request to grant you pre-approval.


Getting a pre-approval from a lender will smooth the homebuying process. Once you have the pre-approval letter in hand, you can shop for a home with confidence. 

If you find the home of your dreams, finalizing the loan and closing will happen faster because you have already done much of the groundwork already.


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