The short answer
To prepare to buy a home, check your credit, save for the down payment and closing costs, gather your income and asset documents, and get preapproved by a mortgage lender. Preapproval tells you exactly how much you can borrow, and a preapproval letter is what makes a seller treat your offer as real. Most buyers can do all of this in one to two weeks.
Mortgage inquiries within a short window - 14 to 45 days, depending on the scoring model - count as one on your credit, so compare two or three lenders.
What is the difference between prequalification and preapproval?
Prequalification is a quick estimate based on what you tell a lender. Preapproval is a lender’s written commitment after they have verified your income, assets and credit. Sellers and listing agents expect a preapproval letter with every offer; a prequalification carries little weight. Preapproval letters are usually good for 60 to 90 days, and your lender can update one if your search runs longer.
What documents do I need for a mortgage preapproval?
- Pay stubs covering the last 30 days
- W-2s for the last two years, or two years of tax returns if you are self-employed or earn commission
- Bank and investment statements for the last two months – every page
- A government-issued photo ID
- Details of any other income: bonuses, child support, rental income, retirement
- If you are getting help with the down payment, a gift letter from the family member
Large, unexplained deposits in your bank statements will be questioned, so keep records of where any big sums came from.
How can I improve my credit before buying?
Pay every bill on time, keep credit card balances low – ideally under 30% of each limit – and do not open new accounts or close old ones in the months before you apply. Pull your free reports at annualcreditreport.com and dispute any errors early, since corrections can take 30 days or more. Even a 20-point improvement can move you into a better rate tier.
Shopping around will not hurt your score much: mortgage inquiries within a short window (14 to 45 days, depending on the scoring model) count as a single inquiry. Get quotes from two or three lenders and compare their Loan Estimates line by line.
How much money do I need to buy a house?
Plan for three buckets of cash:
| Cost | Typical amount | When you pay it |
|---|---|---|
| Earnest money deposit | 1-3% of the price (varies by market) | Within a few days of an accepted offer; credited at closing |
| Inspections and appraisal | Several hundred dollars each | During escrow |
| Down payment | 0-20% depending on the loan | At closing |
| Closing costs | About 2-5% of the loan amount | At closing |
| Reserves | Some loans require one or more months of payments left in savings | Shown to the lender before closing |
Ask your lender about down payment assistance programs; many states and cities offer grants or low-cost second loans, especially for first-time buyers.
Which type of mortgage is right for me?
- Conventional: from 3% down; best rates for strong credit; mortgage insurance can be removed later.
- FHA: 3.5% down with a 580+ score; more flexible on credit; mortgage insurance usually stays unless you refinance.
- VA: for eligible veterans and service members; often no down payment and no monthly mortgage insurance.
- USDA: no down payment in eligible rural and suburban areas, with income limits.
- Jumbo: for loans above the conforming limit; usually needs more down and stronger reserves.
Common questions
How long does mortgage preapproval take?
Often one to three business days once the lender has all your documents. Having pay stubs, W-2s and bank statements ready is what makes it fast.
Does getting preapproved hurt my credit?
A preapproval uses a hard inquiry, which may lower your score by a few points for a short time. Multiple mortgage inquiries within a 14- to 45-day window count as one, so comparing lenders costs little.
How long is a preapproval letter good for?
Usually 60 to 90 days. If it expires before you find a home, your lender can refresh it with updated pay stubs and statements.
What should I avoid after getting preapproved?
Do not change jobs, open new credit, finance a car or furniture, or move large amounts of money without talking to your lender first. Any of these can change your approval right up to closing day.
Get your budget on paper
I can introduce you to lenders I trust who close on time and communicate well, and help you read their quotes side by side. With a preapproval in hand, the next step is choosing the agent who will represent you.