how to get pre-approved for a mortgage 2024

1. Get your ducks in a row

Recognize your credit score: Your interest rate and loan eligibility are mostly determined by your credit score. Examine your credit report for mistakes, and raise any that you find. For higher rates, aim for a score over 670.
Calculate your debt-to-income ratio (DTI): This is the percentage of your gross monthly income that goes towards debt payments. Ideally, keep it below 43% for better chances of pre-approval.
Gather documentation: You’ll need documents like pay stubs, W-2 forms, tax returns, bank statements, and investment account statements to prove your income and assets.

2. Choose a lender

Shop around and compare rates and terms from multiple lenders. Ask friends, family, and real estate agents for recommendations. Consider online lenders as well.
Talk to a loan officer and discuss your financial situation and home buying goals.

3. Apply for pre-approval

Fill out a mortgage application and provide the required documentation. Be prepared for a hard credit check, which may temporarily lower your score.
The lender will assess your financial health and determine your pre-approval amount and interest rate.
You’ll receive a pre-approval letter, which states the maximum loan amount you qualify for and the estimated interest rate.

4. Understand your pre-approval

Pre-approval isn’t a guaranteed loan, but it strengthens your offer to sellers.
The final loan approval might differ based on the property appraisal and other factors.
Your pre-approval typically lasts for 30-60 days, so consider your home search timeline.

Here are some additional tips

Don’t apply for other loans or make major purchases during the pre-approval process.
Keep your finances stable and avoid taking on new debt.
Consider getting a co-signer if you have a low credit score or income.

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