Quick Answer
To get pre-approved, gather ID, recent pay stubs, T4/W-2, tax returns (2 years), bank statements (60–90 days), proof of down payment, and debt statements. Lenders check your credit, DTI/GDS-TDS, employment, and savings. A strong pre-approval letter states your max purchase price, loan type, and rate/term, usually valid 60–120 days.
Prequalification vs. pre-approval (what sellers care about)
| Feature | Prequalification | Pre-Approval |
|---|---|---|
| Credit Check | Soft pull or none | Hard credit pull |
| Documentation | Self-reported info | Full document review |
| Seller Confidence | Low (estimate only) | High (conditional commitment) |
| Time Required | 5-10 minutes | 1-3 business days |
Checklist: documents you'll need
Income & Employment
- Recent pay stubs (30-60 days)
- W-2/T4 forms (2 years)
- Tax returns with all schedules (2 years)
- Employment verification letter
- If self-employed: business tax returns, P&L statements, bank statements
Assets & Down Payment
- Bank statements (60-90 days, all accounts)
- Investment account statements
- Retirement account statements (401k, RRSP)
- Gift letters (if down payment includes gifts)
- Proof of sale (if selling current home)
Debts & Credit
- Credit card statements
- Auto loan statements
- Student loan statements
- Other loan documentation
- Court documents (alimony, child support)
Personal Information
- Government-issued photo ID
- Social Security card / Social Insurance Number
- Divorce decree (if applicable)
- Green card or work visa (if applicable)
Credit & income requirements (DTI / GDS-TDS)
Credit Score Minimums:
- Conventional loans: 620+ (US), varies by lender (Canada)
- FHA/Insured loans: 580+ (US), varies (Canada)
- Higher scores = better rates and terms
Debt-to-Income Ratios:
US (DTI)
- Front-end: ≤28% (housing costs only)
- Back-end: ≤36% (all monthly debts)
- Some programs allow up to 43-50%
Canada (GDS/TDS)
- GDS: ≤32% (housing costs)
- TDS: ≤40% (all debts)
- Must qualify at stress test rate
How long it lasts; when to refresh
Pre-approval letters typically last:
- 60-90 days – Most common validity period
- Up to 120 days – Some lenders offer longer terms
- Rate locks separate – Usually 30-60 days when you find a home
Refresh your pre-approval if:
- It expires before you find a home
- Your financial situation changes significantly
- Interest rates change substantially
- You want to increase your home price range
Rate holds and locking later
Pre-approval vs. Rate Lock:
- Pre-approval = approval to borrow up to X amount
- Rate lock = securing specific rate for specific property
- You'll lock your rate when you have a purchase contract
Canada Rate Holds:
- Some lenders offer 90-120 day rate holds during pre-approval
- Protects against rate increases while house hunting
- Can usually get lower rate if rates drop
Red flags and how to fix them fast
Common Issues
- Recent credit inquiries – Wait 30-45 days between applications
- High credit utilization – Pay down cards before applying
- Irregular income – Provide 2+ years of tax returns
- Job change – Wait until after probation period if possible
- Large recent deposits – Document source (bonus, gift, sale)
- Collections or charge-offs – Pay off or get payment plan
Frequently Asked Questions
What credit score do I need minimum?
Conventional: 620+, FHA/Insured: 580+, but higher scores get better rates. Some portfolio lenders go lower with compensating factors.
Can I switch lenders after pre-approval?
Yes, but you'll need a new pre-approval from the new lender. Consider timing and whether you want another credit pull.
Does pre-approval hurt my credit score?
The hard pull may lower your score by 2-5 points temporarily. Multiple mortgage inquiries within 14-45 days count as one for scoring.
How often should I update my pre-approval?
Refresh when it expires, after significant financial changes, or if rates change substantially in your favor.