7 Items to Bring to Your Mortgage Pre-Approval Meeting
If you’re ready to buy a home, or getting an early start, you might have a meeting set up with a lender to get pre-approved.
But you’re not sure what to bring.
Surprisingly, maybe nothing.
Many lenders can access bank information, employment history, salary information, debts, and more using third-party platforms.
You may have already experienced something similar: budgeting and payment apps use services like Plaid to connect directly with your bank and credit card companies.
To save customers the headache of gathering paper and PDF documents, mortgage lenders have invested heavily in a paper- and PDF-free experience.
Still, not every applicant’s employer or bank can be accessed through these services. Or you have special circumstances or would rather supply documents manually.
In these cases, here’s what you may want to prepare before your pre-approval meeting.
Tip: You don’t need anything for an initial conversation. Your lender will ask for preliminary information and may even be able to issue a pre-approval. Don’t delay speaking with a lender because you think you need to gather documents.
Item 1: Your Comfortable Mortgage Payment
Create a budget and decide how much you’re comfortable spending each month on a home. Don’t worry about how that translates to the home price yet.
The goal is to tally your income and expenses. Decide what spending and saving adjustments you'll make to make homeownership possible.
For example, you may decide to sell a car to eliminate a payment, cancel a few subscriptions, and re-allocate $500 per month from savings to your home payment.
Other buyers might try to keep their future home payment similar to what they're spending in rent.
Whatever you decide, go into the meeting knowing your maximum house payment. Buyers with good incomes and credit may qualify for much more than they’re comfortable paying.
The loan officer can use your desired payment to determine your home price.
Item 2: How Much You Make Per Year
If you’re salaried, this will be easy. Let the loan officer know how much you make per year.
This gets more complicated for hourly employees or those who make overtime, commission, or bonuses. Tell your loan officer your base salary and your approximate earnings in these categories over the past two calendar years and year to date.
The loan officer may pull verification from your employer using a third-party service.
Self-employed individuals should be ready to submit their last two years of tax returns. The lender will analyze the returns and let you know your qualifying income, which may be different than your adjusted gross income on your tax returns.
All applicants must provide a two-year history of employment or equivalent schooling.
Start your pre-approval. Find a lender now.
Item 3: Desired Dollar Amount For the Down Payment and Closing Costs
Don’t worry about percentages at this stage. Determine the dollar amount you have set aside for the down payment and closing costs. This may include gift funds.
Your lender will help you determine which program and down payment level is best for you.
0%: USDA home loan or FHA with down payment assistance
3%: First-time buyer conventional loan
3.5%: FHA
5%: Conventional 5% down
10%: Conventional 10% down or piggyback
20%: Conventional 20% down
Also, have a general idea about how much you have in all accounts, such as checking, savings, investments, and retirement. Money not used for the down payment and closing costs are called "reserves" and can help your chances of approval.
Item 4: Identity Information
With rampant identity fraud in nearly every industry, it doesn’t hurt to bring valid ID to the meeting.
You should also have on hand your social security number and list of addresses for the past two years. These are necessary to pull your credit report, which reveals your credit score and, typically, all your debts.
A credit report pulled by the lender is required to receive a pre-approval. This has minimal impact to your credit and you have 45 days to shop with other lenders without incurring additional hard inquiries.
Item 5: Landlord Information
It’s not always required, but the lender may request contact information for your landlord or a property management representative.
A good rental history can help you qualify in some cases, such as when a file needs a full human-powered manual underwrite instead of a computerized analysis.
The lender will request a rental history; you do not need to request one yourself before the meeting.
Item 6: Documentation of Special Circumstances
Come prepared with documentation covering anything out of the ordinary about your situation. This could include
Bankruptcies within the past seven years
Divorce decree
Alimony or child support (payment or receipt)
Documentation for large deposits shown on bank statements
Offer letter for an upcoming or recent job change
Explanation of employment gaps in the past two years
Any other explanation or documentation for income, employment, asset, or credit issues
Don’t stress too much before your pre-approval meeting. The loan officer will give you action steps to address these items.
Item 7: Determination
Buying a house requires determination, with new terminology, rules, and challenges sprinkled throughout.
Go into your meeting expecting as much. If it’s easier, it will be a nice surprise.
Having a never-give-up attitude will pay dividends as you progress through your journey.
See if You Qualify to Buy a Home
It’s nearly impossible to estimate your homebuying ability. Most people underestimate or overestimate how much they'll qualify for.
It’s not their fault: mortgage rules are complex.
But you can get started by speaking with a lender. You don’t need any documentation on-hand for an initial conversation.
Tim Lucas is the editor and Lead Analyst for MortgageResearch.com. Tim spent 11 years in the mortgage industry and now leverages that real-world knowledge to give consumers reliable, actionable advice. He has been featured in national publications such as Time, U.S. News, MSN, The Mortgage Reports, and more.
