If you’re a first time home buyer, getting pre-approved for a mortgage is probably the most important step in the process. You can use a pre-approval letter to help gauge how much house you’ll be able to afford and start searching for your dream home. You may think that as long as your credit is good and you have money saved up for down payment, there’s no need to spend hours getting pre-approved. But trust me; there are many reasons why it’s worth doing so!

What is a pre-approval?

• What is a mortgage pre-approval?

A mortgage pre-approval is a process that allows you to get an estimate of how much you can afford before you start shopping for homes. The lender determines this after reviewing your income, assets and credit history. You will be given a specific dollar amount that represents what they are willing to give you in terms of financing for your home purchase. This can be considered as a “soft” commitment from the lender as it does not require them to actually fund the loan until after closing on your home purchase with another lender who has made their own decision about whether or not they will provide funding for your mortgage loan.*

Why you need a mortgage pre-approval

There are a lot of reasons why you might want to get pre-approved for a mortgage as a first-time home buyer. If you’re like most buyers, however, your primary concern will be how much house you can afford.

Getting pre-approved allows an underwriter to look at your finances and give you an estimate of the amount that the bank would be willing to lend against your assets and income. This gives you a sense of what kinds of financing options might be available, which helps narrow down the list of places where it makes financial sense for you to start looking (or continue looking).

You should also know that getting pre-approved is not only about finding out whether or not you can afford something but also about getting an idea of how much money needs saving up before going out there and buying a home.

How to get approved for a home loan

A pre-approval is the lender’s way of saying that they are willing to lend you a certain amount of money for your home. The process involves providing your personal and financial information to the lender, which allows them to verify that you can afford the home loan with their help.

Once you have been pre-approved, you’re ready for a home purchase! If there is more than one interested buyer for a property and two or more of them were pre-approved by the same bank or mortgage company, chances are good that those lenders will encourage each other to give exceptional rates and terms on their offers in order to win over the seller.

The mortgage pre-approval process

To get pre-approved, you’ll need to provide income, assets, and liabilities. You’ll also need to provide your credit report and bank statements. Some lenders may ask for letters from employers.

The mortgage pre-approval process is based on the information you provide in your application or during an interview with a loan officer. The lender will then decide whether or not they feel comfortable funding your loan based on that information alone.

Other requirements for getting a mortgage

If you’re looking for a mortgage, there are certain things you need to have on your side:

• A high credit score (700+)
• A down payment of at least 5% of the home’s value. You can use gift funds or money saved up over time to make this initial payment, and many lenders will work with you if your situation is less than ideal.
• Income that’s sufficient to cover all your monthly payments while leaving enough left over for other expenses such as utilities, food, transportation and unexpected expenses like car repairs or medical bills. Ideally you’d have 20% or more additional income left after paying these monthly expenses.If this sounds like a lot of work just to get approved for a loan—it is! It may seem easier just not bother with it at all but then again…what about those poor people who struggle every month just because they don’t own their own property? It’s not fair that some families living paycheck-to-paycheck should suffer more than others because some families do own their own homes while others do not! So what can we do about it?

Getting Pre-Approved as a First Time Home Buyer

Before you start house hunting, it’s important to understand that the pre-approval process is not something you want to rush through. When you pre-qualify for a mortgage, lenders will look at your current income, employment history, credit score and debt-to-income ratio. If all of those items check out favorably with the lender in question (and they usually do), then they’ll give you a tentative yes on buying a home. However, getting approved for an actual loan only happens after an appraisal is done on the home itself and there are no major issues or concerns regarding your finances or credit score.

With this in mind, it’s important to get started early when looking into first time home buyer programs in your area—and don’t worry! There are plenty of ways around having to pay any money up front when beginning this process:

• Some lenders offer free online applications that walk users through filling out basic information about their finances before sending them over directly to speak with someone at the bank over phone call or video chat session.* Other options include contacting local community centers where counselors might be able to help explain which loans best fit within one’s particular situation

Now that you know what a pre-approval is, and how to get one for yourself, it’s time to jump into the process! The first step is finding out how much you can afford by completing a mortgage calculator or talking with a loan officer who can give you an estimate. Next, gather all of your paperwork together so they can start processing your application. Finally, go through the underwriting process to ensure that everything checks out before closing on your home purchase!