The Importance of Preapproval

If you’re planning to buy a home, one of the most important steps you can take before you start house-hunting is getting preapproved for a mortgage. Preapproval not only shows sellers that you’re serious but also helps you understand what you can realistically afford.

What Is Mortgage Preapproval?

Mortgage preapproval is a written estimate from a lender that states how much you may be able to borrower, based on a review of your finances. Unlike a quick prequalification, which is often based on self-reported information, preapproval often requires documentation and a credit check. Because of this, preapproval carries much more weight when you’re ready to make an offer.

Why Preapproval Matters

Preapproval is important for several reasons. First, it tells you your price range. Instead of guessing what you can afford, you’ll have a clear idea of your monthly payment, down payment requirements, and overall budget. This helps you shop with confidence and avoid wasting time on homes outside your range.

Preapproval also makes you a stronger buyer in the eyes of sellers and real estate agents. In competitive markets, a preapproved buyer’s offer is more attractive because it shows financing is already lined up. In some cases, sellers won’t even consider an offer without proof of preapproval.

Preapproval can also uncover potential issues early. If there are problems with your credit, debt-to-income ratio, or documentation, you’ll find out before you’re under contract, giving you time to address them.

How to Get Preapproved

At Fourth City Mortgage, preapproval is easy. The first step is scheduling a brief phone call with one of our Home Equity Advisors. On this call, we will gather some basic information about your financial situation and homebuying goals. From there, our team reviews your details and prepares your preapproval letter. In most cases, we can have preapprovals ready to go in just a few hours, giving you the confidence to start shopping for homes right away.

What You’ll Need for Preapproval

Although our process is streamlined, you’ll still need a few standard items to get preapproved:

• Driver’s License (or any government issued ID)
• Income Documentation

 The specific income documentation you will need will vary depending on your employment status. For W2 employees, all you’ll need is your most recent paystub and/or W2. For self-employed individuals you will need tax returns, bank statements, or a profit/loss statement for your business.

When it comes to buying a home, timing is everything. Having these documents ready help speed things up and ensures the preapproval letter is as accurate as possible.

Final Thoughts

Preapproval is valuable for nearly every homebuyer, but it’s especially helpful for first-time buyers who may be unfamiliar with the process. It’s also essential for buyers in competitive markets where multiple offers are common. Having a preapproval can be the difference between getting the home you want and losing out to another offer.

Getting preapproved is one of the smartest moves you can make before buying a home. It provides clarity on what you can afford, positions you as a serious buyer, and helps you avoid surprises later in the process. At Fourth City Mortgage, we guide clients through the preapproval step and explain what the numbers really mean for their home search. If you’re thinking about buying a home, start with a preapproval, you’ll enter the market prepared and confident.