Securing a mortgage preapproval is a crucial step in the homebuying process. It not only strengthens your offer in competitive markets but also clarifies your budget. To obtain a preapproval, lenders evaluate your financial stability against specific criteria. Below are the key requirements you should prepare for.

1. Proof of Income and Employment

Lenders require documented evidence of stable income. Be prepared to submit:

• Recent pay stubs (last 30 days)
• W-2 or 1099 forms from the past two years
• Tax returns (if self-employed or with variable income)
• Contact information for employer verification

2. Credit Score and History

A strong credit profile demonstrates reliability. Most lenders require:

• Minimum credit score: Typically 620+ for conventional loans (higher for better rates)
• No recent bankruptcies or foreclosures
• Low credit utilization (below 30%)

3. Debt-to-Income Ratio (DTI)

Your DTI compares monthly debt payments to gross income. Ideal thresholds include:

• Front-end DTI: ≤28% (housing expenses only)
• Back-end DTI: ≤36–43% (all debts combined)

4. Down Payment Verification

Lenders verify your ability to cover the down payment and closing costs. Provide:

• Bank or investment account statements (2–3 months)
• Gift letters (if using funds from family)
• Documentation for other assets (e.g., retirement accounts)

5. Additional Documentation

Depending on your situation, you may need:

• Photo ID (driver’s license, passport)
• Rental history (for first-time buyers)
• Divorce decrees or child support records (if applicable)

Final Tips for Success

To streamline the preapproval process:

1. Check your credit report for errors beforehand.
2. Avoid major financial changes (e.g., new loans, job shifts) during the process.
3. Compare offers from multiple lenders for the best terms.

By preparing these documents and meeting lender criteria, you’ll position yourself as a confident, qualified buyer.