Pre-Qualification vs. Pre-Approval vs. Underwriting Approval
Pre-qualification is a quick, unverified estimate based on information you self-report. No documents are checked. It has essentially no value in a competitive market — sellers won't take it seriously.
Pre-approval involves a hard credit pull and verification of income, assets, and employment. The lender reviews your actual documents and conditionally commits to lend up to a specified amount. This is what most sellers require to consider an offer.
Underwriting approval (clear to close) is the full verification stage, after a specific property is under contract. The underwriter reviews the full loan file, appraisal, and title. This is the real green light.
What Documents You Need
Prepare these before you start: two years of W-2s or tax returns (self-employed borrowers need two years of personal and business returns), 30 days of recent pay stubs, 60 days of bank statements for all accounts, government-issued ID, and your Social Security number for the credit pull.
If you have other income sources — rental income, alimony, investments — document those too. The more complete your file, the faster the process moves.
How Credit Score Affects Your Rate
Mortgage rates are tiered by credit score. The difference between a 680 and a 760 score on a $350,000 loan can be 0.5–0.75% in rate — that's $100–150/month. If your score is below 720, it's worth spending 3–6 months paying down credit card balances (keeping utilization under 30%) before applying.
How Many Lenders Should You Contact?
At minimum, three. Rate shopping is essential — lenders routinely charge different rates and fees for identical borrowers. Multiple mortgage applications within a 45-day window count as a single hard inquiry on your credit report under FICO scoring models, so there's no penalty for shopping aggressively.
How Long Does Pre-Approval Last?
Most pre-approvals are valid for 60–90 days. In an active job market or during periods of rate volatility, your lender may ask you to refresh your file before closing if more than 60 days have passed.