Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."
Before you shop for a home, it’s a good idea to get a mortgage pre-approval. While not required, this will help you establish a homebuying budget, strengthen your purchase offer, and prepare you for the official mortgage application later on.
There’s a stack of documents needed for a mortgage pre-approval, which a lender will use to verify your financial health.
Find out what documents are required so that you can start shopping for your dream home sooner:
Why it matters: Checking your ID helps the lender verify your identity and prevent fraud.
Everyone on the home loan will need to show a government-issued ID. Acceptable forms of identification can include:
- Driver’s license
- Social Security card, or individual taxpayer identification number (ITIN)
- State- or federal-issued ID card
2. Income verification
Why it matters: Lenders use these pre-approval documents to go over your income from the past two years and verify your ability to repay the mortgage. The documents you need depend on where you receive income.
For salaried employees
If you work for an employer, it should be relatively easy to get these pre-approval documents:
- W-2 forms from the past two years
- Pay stubs from the past 30 days
- Two most recent bank statements
- Personal tax returns from the past two years
- Your most recent end-of-year pay stub if your income includes overtime or bonuses
For freelancers and independent contractors
Self-employed borrowers don’t receive W-2 forms or pay stubs from an employer, so they’ll need to produce the following pre-approval documents to show they’ve earned a steady income for at least the past two years:
- Business and personal tax returns from the past two years
- A copy of current state or business licenses, if applicable
- IRS Form 4506-T, which allows lenders to access your tax records
- A profit-and-loss statement
- A balance sheet
- Asset account statements, such as retirement or investment accounts
- Any additional income, such as Social Security or disability
For landlords and investors
If you rent out an investment property, your tenants’ rent payments can count toward your income. This can help you qualify for the new mortgage.
For documentation, you’ll need to provide a current lease that shows the rent amount.
Credible’s pre-approval process is quicker than most — it takes just a few minutes — and can help you compare prequalified rates from all of our partner lenders conveniently online.
3. Debt statements
Why it matters: During the pre-approval process, the lender will calculate your debt-to-income ratio. To get an accurate reading, they’ll need to see your most recent billing statements from any loans or credit cards with a balance.
Your DTI ratio helps the lender determine whether you’ll qualify for the mortgage and how much you can afford.
A lower DTI ratio is desirable, but requirements vary with each loan type. Here’s what mortgage lenders will generally want to see:
|Loan type||Front-end DTI||Back-end DTI|
|FHA||31% to 33%||43% to 45%|
(but lenders are free to go higher)
Look for your most recent statements if you have outstanding debt, which might include:
- Auto loans
- Student loans
- Other types of installment loans
- Tax liens
- Credit card statements
Learn More: 10 Ways to Pay Off Debt Fast
4. Proof of assets
Why it matters: These pre-approval documents show the lender that you have enough money to cover the down payment, closing costs, and cash reserves.
Lenders will want to look at the following assets when you apply for your pre-approval:
- Bank statements: Two months’ worth of bank statements for each account whose assets you’ll use for the loan
- Retirement and brokerage accounts: Two most recent statements from retirement and investing accounts, such as IRAs, 401(k)s, and CDs
5. Other documents
Why it matters: If you rely on other sources of income or you have a special financial situation, you’ll need to show documentation to support your mortgage pre-approval.
Some examples of other documentation a lender might request include:
- Rent history: If you’ve been renting your home, you’ll need to show rent payments from the past 12 months — typically in the form of canceled checks — along with contact information for your landlord.
- Divorce decree or court order: If alimony and child support payments make up a large part of your income, you’ll need to show a copy of your divorce decree and/or relevant court orders.
- Bankruptcy and foreclosure: After certain negative credit events, you might need to honor a waiting period before you can take out a new mortgage. If you’ve filed for bankruptcy or foreclosure in the past few years, ask your lender about the waiting period and what documents you need for a mortgage pre-approval.
- Down payment gift letters: In some cases, borrowers can use gift funds for the down payment or cash reserves. The person giving you the money will likely need to provide bank statements to show where the money originated. Then, they’ll need to sign a letter saying the money isn’t a loan. Depending on the lender, this might not be required for a pre-approval — but it will be part of the paperwork needed for a mortgage.
Credible makes it easy to secure a pre-approval letter from our partner lenders, and it takes just minutes.
|How long does it take?||1 to 3 days||3 minutes|
|Credit check||Hard credit pull|
(negative impact on your credit)
|Soft credit pull
(no impact on your credit)
|Online process||Typically minimal; instead processed via in-person visit at a branch or phone call with a licensed loan officer||100% online|
|Compare multiple lenders?||No, visit multiple lenders to receive multiple pre-approval letters||Yes, pre-approved across multiple lenders at once|
|Multiple pre-approval letters to make additional property offers?||No, must submit another request to lender for new pre-approval letter||Yes, generate additional letters instantly with a customized loan amount|
Ready to get pre-approved through Credible?