Pre-approval readiness checklist

Pre-approval is a lender's written estimate of how much they'd lend you, based on a real review of your credit, income, and assets. It's not a loan commitment — but in most markets, sellers won't take your offer seriously without one. The good news: you can do most of the preparation before you ever talk to a lender. Work through this checklist over the 3–6 months before you plan to buy.

1. Know your credit

• Pull your credit reports. You're entitled to free reports from the three major bureaus. Read all three — errors are common, and only you will catch them.
• Dispute errors early. Corrections can take 30–60 days. Start months before you need the score.
• Know your score range. You don't need perfection, but knowing where you stand tells you which loan types are realistic.
• Don't close old cards. Length of credit history and available credit help your score; closing accounts can hurt both.

2. Stabilize your finances

• Pay every bill on time. Recent late payments hurt more than old ones. Set up autopay for at least minimums.
• Pay down revolving balances. High balances relative to credit limits ("utilization") drag scores down; getting under 30% — ideally under 10% — helps.
• Avoid new debt. No new car loans, no furniture financed at 0%, no new credit cards in the months before applying. New accounts and inquiries can lower your score and raise your debt-to-income ratio.
• Don't move money mysteriously. Lenders trace large deposits. Keep funds seasoned in your accounts and document any large transfers.
• Keep your job situation steady. Lenders verify employment; a job change mid-process creates paperwork at best and problems at worst.

3. Gather your documents

• Income: recent pay stubs (usually 30 days) and W-2s or 1099s for the last two years. Self-employed? Expect to provide two years of tax returns and possibly profit-and-loss statements.
• Assets: bank and investment statements for the last two to three months — all pages, even the blank ones.
• Debts: statements for anything you pay monthly; the lender will find them on your credit report anyway, so have them ready.
• ID: government-issued photo ID and Social Security number.
• Extras, if they apply: divorce decrees, child-support documentation, gift letters for down payment help, landlord contact for rent verification.

4. Know your budget first

• Run the affordability calculator. Walk in knowing your own number — don't let the maximum approval become your budget.
• Budget the full PITI. Use the payment calculator with realistic taxes and insurance, not just principal and interest.
• Keep an emergency fund separate. Your down payment and closing costs should not empty your savings. Lenders like seeing reserves; life requires them.

5. Understand what pre-approval is — and isn't

• It involves a hard credit inquiry. That's normal and expected — but don't collect pre-approvals from eight lenders in eight months. Rate-shopping inquiries in a short window are generally treated as one.
• It's not a guarantee. The lender re-verifies everything before closing. Don't change your financial picture between pre-approval and closing day.
• Compare more than the rate. Fees, points, lender credits, and responsiveness all matter. A slightly higher rate with far lower fees can be the better deal.