Before a lender will put a preapproval amount in writing, it wants to verify five things: your identity, your credit, your income, your existing debts and the money you have for a down payment and closing costs. Gather the paperwork for each before you apply and the process can take days instead of weeks.
The preapproval checklist
- Photo ID and Social Security number for every borrower on the loan.
- Pay stubs covering roughly the most recent 30 days.
- W-2s from the past two years, or 1099s if you’re paid as a contractor.
- Federal tax returns for the past two years, with all schedules, especially if you’re self-employed, earn commissions or have rental income.
- Bank and investment statements for the past two months, every page, for every account you’ll use for the down payment, closing costs or reserves.
- Retirement account statements, if they’ll count toward reserves.
- Debt details: student loans, auto loans, credit cards, child support or alimony obligations.
- A gift letter, if a relative is contributing to the down payment, plus records showing the transfer.
- Explanation letters for anything unusual: employment gaps, large deposits, a past bankruptcy or foreclosure.
- Your consent to a credit check, which will be a hard inquiry.
Lenders vary in exactly what they request, and self-employed borrowers should expect extra documentation such as business tax returns or a profit-and-loss statement. But this list covers most applications.
Credit: the score and the story behind it
Mortgage lenders typically pull reports from all three credit bureaus and use the middle of your three scores. With a co-borrower, the lender often uses the lower of the two middle scores.
Minimum score rules depend on the loan type. FHA loans allow down payments as low as 3.5% with a score of 580 or higher, while scores from 500 to 579 generally require 10% down. For conventional loans, Fannie Mae’s automated underwriting system dropped its hard 620 minimum score for new applications in November 2025 and now weighs the score alongside other risk factors. In practice, many individual lenders still set their own floors, and a higher score earns noticeably better pricing.
Beyond the number, underwriters look at recent late payments, collections and how much of your available credit you’re using. A few months before you apply, check your reports at AnnualCreditReport.com and dispute any errors. Paying card balances down before the lender pulls your credit can raise your score quickly. Our article on credit utilization explains why.
Income: steady, documented and likely to continue
Lenders generally want to see about two years of consistent income history. Salaried W-2 employees have the easiest time. If your income includes overtime, bonuses or commissions, lenders typically average it over two years and may discount it if it’s falling. Self-employed borrowers are usually judged on the net income shown on their tax returns, after business deductions, which can be much lower than what they think of as their earnings.
Expect the lender to verify your employment directly, often shortly before closing as well as at preapproval.
Debt: the ratio that sets your price range
Your debt-to-income ratio, or DTI, compares your monthly debt payments, including the projected mortgage payment with taxes and insurance, to your gross monthly income. It’s often the main factor limiting how much a lender will approve. Conventional loans run through Fannie Mae’s automated system can go as high as 50% DTI for strong applicants, but many borrowers are approved at lower levels, and FHA has its own guidelines. Our guide to debt-to-income ratio walks through the calculation.
Keep in mind that the maximum you’re approved for isn’t the same as what you can comfortably pay. Lenders don’t account for child care, retirement savings or the cost of maintaining a house.
Assets: where the money comes from
The lender will confirm you have the down payment and closing costs, and sometimes a few months of payments in reserve. It will also look closely at where that money came from. Large deposits that don’t match your normal pay pattern usually have to be documented. Money that’s been sitting in your account for a couple of months is often called “seasoned” and is easiest to use.
Cash kept outside a bank, or a recent unexplained transfer from a friend, can delay or derail an approval. If someone is giving you money, do it with a proper gift letter and a traceable transfer.
Prequalification is not preapproval
The terms aren’t legally standardized, and lenders use them differently. Generally, a prequalification is a quick estimate based on what you report, sometimes with only a soft credit pull. A preapproval involves verified documents and a hard credit check, which is why sellers and their agents take it more seriously. The CFPB notes that what matters is what the lender actually reviewed, not the label on the letter.
Even a preapproval isn’t a final commitment. The loan still depends on an appraisal, a title review and confirmation that nothing in your finances has changed.
Once you’re preapproved
The weeks between preapproval and closing are when good approvals go bad. Until the loan funds:
- Don’t open new credit, including store cards or financing for furniture and appliances.
- Don’t change jobs if you can avoid it, or tell your lender immediately if you must.
- Don’t make large unexplained deposits or withdrawals, and keep the paper trail on any money you move.
- Keep paying every bill on time, including ones on autopay you might overlook.
- Get Loan Estimates from more than one lender. Comparing at least two or three offers can turn up meaningful differences in rates and fees. Multiple mortgage credit checks within a short window are generally treated as a single inquiry for scoring, as our guide to prequalification and rate shopping explains.
- Watch the expiration date. Preapproval letters are often good for a limited period, commonly 60 to 90 days, after which the lender will want updated documents.
Frequently asked questions
Does getting preapproved hurt my credit score?
The hard inquiry can lower your score slightly, usually by a few points. FICO scores count multiple mortgage inquiries within a short window as one, so getting preapproved by several lenders in the same couple of weeks generally costs no more than one.
Can I be preapproved and still be denied?
Yes. A low appraisal, a problem with the property’s title, a job loss, new debt or a drop in your credit score can all derail the loan after preapproval.
Should I ask for a letter for the full amount I’m approved for?
Many buyers ask the lender for a letter matching the specific offer price instead. That way a seller doesn’t see that you could pay more. Lenders can usually issue an updated letter quickly.
How early should I get preapproved?
Close to when you’ll start making offers, since the letter has a shelf life. Checking your credit and gathering documents can start months earlier.
