Pre-qualification vs. pre-approval
A pre-qualification is an estimate based on numbers you state. A pre-approval means a lender has verified your income, assets, and credit and will lend up to a stated amount. Listing agents can tell the difference instantly, and they price your offer accordingly.
The documents that matter
W-2 employees: two recent pay stubs, two years of W-2s, and two months of bank statements. Self-employed: two years of tax returns, all schedules and K-1s. Everyone: a valid ID and permission for a credit pull.
Send complete documents once rather than fragments five times. A clean package can turn into a letter within hours.
What underwriting looks at
Three ratios drive the decision: your debt-to-income ratio (usually capped between 43% and 50% depending on program), your loan-to-value, and your reserves after closing. Credit score sets your pricing tier more than your approval odds.
Keep the letter fresh
Pre-approvals typically last 60-90 days and can be refreshed with updated pay stubs. Ask for letters tailored to each offer amount — showing your maximum budget on a lower offer weakens your negotiating position.
