The Importance Of Getting A Pre-Approval on Mortgage Loan

Let’s us briefly explain to you what is pre-approval on mortgage loan? A mortgage pre-approval is one of the important process when applying a mortgage loan. The homebuyers will need to acquire a pre-approval letter by consulting with a bank (lender). Through the pre-approval letter, you’ll get to know the maximum amount that you can borrow for you to determine which type of property that you should looking for.

The Importance Of Getting A Pre-Approval on Mortgage Loan Click To Tweet

This is very important because once you get the pre-approval letter mean the bank has examined your credit report as we as verified all of you documentation to approve a particular loan amount. So, what are the documents that you need to show to the bank? Here you are!

1. Proof of Assets

You will need to present bank statements and investment account statements to prove that you have funds for the down payment and closing costs, as well as cash reserves. If you receive money from a friend or relative to assist with the down payment, you will need a gift letter to prove that this is not a loan.


The assets can including rentals or fixed deposit. You need to make sure all of your side income is banking to your bank account. Apart from that, should you running an online business, make sure you have show all of the income certification to the lender such as Paypal.

2. Good Credit Rating

This basically means you consistently pay all your loans or credit cards on time. If you have credit cards be sure not to maintain a healthy level and try your best to avoid the credit limit. Pay as much as possible and the fewer credit cards you have, the better.


You should be aware of personal credit score is very important for any loan. As every lender will refer your credit history to decide whether to approve your loan application. Besides, it is advisable to check your credit score yourself before the lenders do. (Click here to read How To Check Your Credit Score)

3. Employment Verification

Your lender will not only want to see your pay stubs, but is also likely to call your employer to verify that you are still employed and to check on your salary. If you have recently changed jobs, a lender may want to contact your previous employer. Lenders today want to make sure they are loaning only to borrowers with a stable employment. Self-employed borrowers will need to provide significant additional paperwork concerning their business and income.


Well, this is depend on the situation, some lenders will and some lenders don’t. If you changed the jobs, it is advisable to not to apply for mortgage loan until your current job is stable or have been confirmed by a company.

4. Documentation

Your lender will need to copy your driver’s license and will need your Social Security number and your signature allowing the lender to pull a credit report. Be prepared at the pre-approval session and later to provide (as quickly as possible) any additional paperwork requested by the lender. The more cooperative you are, the smoother the mortgage process will be.


The most common document that lenders need is your identity card. It is just a simple and secure process which to protect you from identity theft by verify your identity.

In conclusion, we want to add in something in point 3 which is Employment Verification. Should you are self-employed and want to apply mortgage loan. You’ll need to make sure your company is registered as legit business and you have to open a current account for your business. Through the current account, lender will get to know how many net income that you have earn from your business. In another way, should you are the only one who running the business, it is advisable to create a proper payslip for your own as bank want to make sure you are getting paid every month.


Like this article or found it helpful? Share it!

Follow us on Twitter for more news, tips and inspiration. Become our mate on Facebook and explore our Pinterest boards.

Leave a Comment