Getting pre-approved for a mortgage before you start house-hunting is one of the most important steps you can take. It tells you exactly how much you can afford, makes your offers more competitive, and speeds up the closing process.
Pre-Qualification vs. Pre-Approval
These terms are often confused but are very different:
- Pre-qualification: A quick estimate based on self-reported information. No verification, no credit pull. Carries little weight with sellers.
- Pre-approval: The lender has actually verified your income, assets, and credit. A pre-approval letter carries significant weight — sellers know you've already passed financial screening.
In Broward County's competitive market, most sellers and listing agents require a pre-approval letter (not just pre-qualification) before seriously considering an offer.
Documents You'll Need
- Income documentation:
- W-2 employees: Last 2 years of W-2s and 30 days of recent pay stubs
- Self-employed: Last 2 years of federal tax returns (all pages) and year-to-date profit & loss statement
- Asset documentation: Last 2–3 months of bank statements for all accounts (checking, savings, investment)
- Identification: Government-issued photo ID
- Employment history: Contact information for employers (lender may call to verify)
- Current debt obligations: Auto loans, student loans, credit cards, alimony/child support
What Lenders Evaluate
Credit Score
Lenders pull your credit from all three bureaus (Equifax, Experian, TransUnion) and typically use the middle score. General thresholds: FHA accepts 580+ (3.5% down); conventional typically 620+; best rates at 740+. Check and monitor your credit before applying.
Debt-to-Income Ratio (DTI)
DTI compares your monthly debt payments to your gross monthly income. Two ratios matter:
- Front-end DTI: Housing costs (mortgage, property taxes, insurance, HOA) ÷ gross income. Target: ≤28–31%
- Back-end DTI: All monthly debt payments ÷ gross income. Most programs allow up to 43–50%
Employment History
Lenders want to see 2 years of consistent employment in the same field. Job gaps or recent career changes may require explanation. Self-employed buyers need 2 years of self-employment history.
Assets and Reserves
Lenders verify you have enough funds for the down payment, closing costs, and reserves (savings remaining after closing). Gifted funds are allowed but must be documented.
How Long Is a Pre-Approval Valid?
Most pre-approval letters are valid for 60 to 90 days. If your search takes longer, you'll need to update your documents and get a new letter. Major financial changes (new debt, job change, large deposits) during this period should be disclosed to your lender immediately.
Protecting Your Pre-Approval
- Do not open new credit accounts or take on new debt
- Do not make large unexplained deposits into bank accounts
- Do not change jobs without consulting your lender
- Do not miss payments on existing accounts