Dos While Applying For a Pre-Approval Letter

Get Organized: Lenders will need a wide variety of financial documents, such as income statements, W2 forms and bank statements, before approving you.

Be prepared to wait: Some lenders can take several weeks before sending you a pre-approval letter. If you're responsive to queries and requests for additional information, the process will move more quickly.

Make sure you know what the lender's assumptions were in issuing your pre-approval: The loan terms spelled out may not be guaranteed. And if you change your financial situation – such as making a major career move or shifting money around a lot between multiple bank accounts – your pre-approval could be invalidated later on.

Getting your Credit in Order: Don't start shopping for homes until you have a solid credit score, as that can affect the rates and fees you qualify for. It can also improve your debt-to-income ratio, which is a key factor in getting approved for mortgage financing.

Keep Your Debt-To-Income Ratio Near 50 Percent: If your debt level rises while your income stays the same, your mortgage approval can be revoked at the point of purchase.

If you can't get preapproved for the amount you want to spend on a home, shop around. You may be able to find a lender who is more willing to work with you.

A pre-approval letter signals to sellers that you are a serious buyer and lender. It reassures them that you're committed to the sale and that your mortgage will be backed by a reliable financial institution.