First-Time Homebuyer's Guide, Part 2: Getting Pre-Approved

Once your finances are in order, the next step is a mortgage pre-approval. It's one of the most useful things you can do before you start touring homes.

Pre-qualified vs. pre-approved

A pre-qualification is a quick estimate based on what you tell a lender. A pre-approval goes further: the lender reviews your documents and credit and states how much they're prepared to lend. Sellers take a pre-approval far more seriously.

Compare lenders

Rates, fees and service vary. It's worth talking to more than one lender and comparing their loan estimates side by side — including the fees, not just the interest rate.

Ask about loan types

There are several kinds of mortgage, with different down payment requirements and terms. A good lender will explain which ones fit your situation and why.

Keep things steady

Between pre-approval and closing, avoid changing jobs, taking on new debt or moving large sums of money without talking to your lender first. Any of these can affect your approval.

In Part 3 we'll start the fun part: finding the right home.