Getting pre-approved for your mortgage is one of the best ways to ensure the home-buying process runs smoothly. Many sellers these days expect a pre-approval letter as part of an offer, so take care of it early in your search with these four easy steps.

  1. Check your credit – Request a free credit score or see if your bank automatically provides you one. Higher scores qualify for better loan rates, and most lenders want a score of at least 620. You should also look over your credit history report. Make certain none of your accounts are delinquent, and that your report is free of errors. You may dispute any errors you find.
  2. Determine your debt-to-income ratio (DTI) – This is the amount of money you owe every month vs. how much you earn. Lenders prefer a DTI of 36% or under, including your future mortgage payments.
  3. Collect your paperwork – You’ll need a lot of documentation for your application including your Social Security Number (or Individual Taxpayer Identification Number for foreign nationals), current addresses, employment records, bank account information and proof of income. You will also likely need tax documents, such as W-2s dating back at least two years.
  4. Contact at least three lenders – The only way to know you’re getting a good deal is to compare offers. This step can save you thousands of dollars over the life of the loan. Once you’ve submitted your application, lenders are required to notify you if you’ve been pre-approved within 3 business days.