Pre-approval is the step that decides whether your offer gets taken seriously. In a market where a seller has more than one offer on the table, an offer with a real pre-approval behind it and an offer without one are not competing on equal footing.
The good news is that it is mostly paperwork, and most of it you already have. Here is the list, and more usefully, why each thing is on it.
Income
Two most recent pay stubs. Recent, covering a full pay period each. If your income includes overtime, bonus or commission, those show up here and they matter, because that income usually has to be shown as consistent rather than as one good month.
W-2s for the last two years. Two years is the standard look-back for salaried and hourly income.
Federal tax returns for the last two years, all pages and all schedules. People send the summary page and it always comes back as a request for the rest.
If you are self-employed, a business owner, a contractor, or paid on 1099: two years of personal and business returns, a year-to-date profit and loss statement, and any K-1s. Self-employed income takes more documentation, not because anyone doubts you, but because the number that matters is what shows after business deductions, and that takes the full picture to establish.
If you receive other income: Social Security or pension award letters, child support or alimony documentation along with proof it is actually being received, or a disability award letter. Retirement and disability income counts, and it needs its own paper trail.
Assets
Two months of statements for every account you will draw from. Checking, savings, money market. All pages, including the ones that are blank except for a footer, because a statement missing page 4 of 5 will get asked about.
Most recent statement for retirement or brokerage accounts you might use.
Gift documentation if someone is helping. A family gift toward a purchase needs a signed letter confirming it is a gift and not a loan, plus a paper trail showing where it came from and that it arrived. Start this conversation early. It is the single most common cause of a last-minute scramble.
Identity and history
Government-issued photo ID and your Social Security number.
Two years of residence history with addresses, and landlord contact information if you have been renting.
Two years of employment history, including gaps. A gap is not a problem. An unexplained gap is a delay.
If applicable: divorce decree, bankruptcy discharge papers, or a Certificate of Eligibility if you are using a VA loan. Veterans, get your COE started early rather than at the end.
The three things that actually slow people down
Large deposits that are not payroll. Any deposit that does not obviously match your income will get flagged and you will be asked to source it. Selling a truck, a tax refund, cash from a family member, a Venmo settling-up. None of these are problems. All of them need an explanation and often a document. If you know a large deposit is coming, keep the receipt.
Opening new credit during the process. Financing furniture, opening a store card at checkout, taking out a car loan between pre-approval and closing. Any of these changes the picture your approval was built on, and it can change it after you are already under contract. The rule is simple: from pre-approval until you have keys, do not open new credit and do not make large purchases on existing credit.
Moving money around. Consolidating accounts, transferring funds between banks, or moving money into your account to look better on paper all create sourcing work. Leave your accounts alone once the process starts.
Pre-qualification and pre-approval are not the same thing
Worth being clear about, because the words get used loosely.
A pre-qualification is an estimate based on what you say. It is quick, it is useful for orientation, and it carries limited weight with a seller.
A pre-approval means your documents were actually reviewed and your credit was actually pulled. It is the one that belongs with an offer.
Ask which one you are getting. If a lender gives you a letter in fifteen minutes without looking at a single document, you have the first kind.
Why a broker instead of one bank
A bank offers you its own products. If your file fits them, that works fine.
A broker shops your file across multiple lenders, which matters most when your situation is not the standard salaried W-2 case. Self-employed income, a recent job change, a credit event a few years back, a manufactured home, a rural property, a jumbo amount. Different lenders have genuinely different appetites for the same file, and one lender’s decline is another lender’s routine approval.
That is the whole value of the model: your file gets shown to more than one door.
What to do with this
Put the documents in one folder before you start looking at houses. Buyers who arrive with their paperwork gathered get through pre-approval fast, and they get to make an offer the same week they find the house instead of a week later.
If you are not sure which of these apply to your situation, that is a short conversation rather than a research project. Reach out and we will tell you exactly what your file needs.
Dawn Futch, Mortgage Loan Originator, NMLS #2090515. Serving buyers throughout Texas.