Learn how to avoid common mistakes that can delay or derail your mortgage pre-approval as a first-time home buyer. Get tips on credit, documents, lenders, and more.

Communication between the borrower and the local Originator are critical for a smooth process. Surprises sometimes come up in the loan process but constant communication between the lender and the borrower can smooth out any part of the process that becomes challenging. This is especially important for first-time home buyers. KP

How do you avoid common mistakes that can delay or derail your pre-approval?

Getting pre-approved for a mortgage is a crucial step for first-time home buyers who want to show sellers and agents that they are serious and ready to buy. However, some common mistakes can delay or derail your pre-approval process and cost you time, money, and opportunities. Here are some tips on how to avoid them and get pre-approved faster and smoother.

1 Check your credit score

Your credit score is one of the main factors that lenders use to determine your eligibility and interest rate for a mortgage. Before you apply for pre-approval, check your credit score and report for any errors or issues that might lower your score or raise red flags for lenders. If you find any, dispute them with the credit bureaus and resolve them as soon as possible. You can also improve your score by paying down your debts, avoiding late payments, and keeping your credit utilization low.

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2 Gather your documents

To get pre-approved, you will need to provide various documents to prove your income, assets, debts, and identity. These may include pay stubs, tax returns, bank statements, W-2s, 1099s, driver's license, and social security card. Make sure you have all the required documents ready and organized before you apply, and update them if there are any changes. Missing or outdated documents can cause delays or denials in your pre-approval process.

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Erin L.
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This is the most important step. In my experience, the organization and responsiveness of the borrower impacts the process most adversely. Make sure to provide the most recent and consecutive documentation available. If your lender reaches out for additional information, respond in a timely manner. Always ask if you don’t understand inquiries.

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3 Shop around for lenders

Different lenders may offer different terms, rates, and fees for your mortgage, so it pays to shop around and compare your options. You can get pre-approved by multiple lenders within a short period of time without hurting your credit score, as long as you use the same type of loan and the same information. This way, you can find the best deal for your situation and budget, and have more leverage in negotiating with sellers and agents.

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Ravonne John

Owner/operator of Rim Properties, LLC; Real estate agent with The Sudar Group; Leadership council for Contractors, Closers and Connections of NWA
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Just getting in the door for an offer on a home typically requires a pre-qualification or pre-approval letter from a lender. That does not lock you into that lender. You can still shop around for the best rate, and you should! Keep in mind when a lender is giving a “lender credit,” they are typically raising your interest rate. ALWAYS compare to make sure you save yourself hundreds or thousands over the life of your loan.

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4 Avoid major financial changes

Once you get pre-approved, you should avoid making any major financial changes that could affect your credit score, income, or debt-to-income ratio. For example, don't apply for new credit cards or loans, don't make large purchases or deposits, don't change jobs or income sources, and don't co-sign for anyone else's debt. Any of these changes could raise questions or concerns for your lender and require additional verification or documentation, which could delay or cancel your pre-approval.

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5 Communicate with your lender

Your pre-approval is not a guarantee that you will get the final approval for your mortgage. It is a conditional statement that depends on your ability to meet the lender's requirements and the property's appraisal and inspection. Therefore, you should communicate with your lender regularly and promptly throughout the process, and inform them of any changes or issues that might affect your pre-approval. You should also respond to their requests for information or documents as soon as possible, and follow their instructions and advice.

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Kevin Peranio

Chief Lending Officer at PRMG, Inc. #🟦
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Communication between the borrower and the local Originator are critical for a smooth process. Surprises sometimes come up in the loan process but constant communication between the lender and the borrower can smooth out any part of the process that becomes challenging. This is especially important for first-time home buyers. KP

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6 Review your pre-approval letter

Your pre-approval letter is a document that shows how much you can borrow, what type of loan you qualify for, and what interest rate and fees you can expect. It also shows the expiration date of your pre-approval, which is typically 60 to 90 days. You should review your pre-approval letter carefully and make sure you understand all the terms and conditions. You should also keep a copy of it and use it as a tool to show your credibility and bargaining power to sellers and agents.

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Ravonne John

Owner/operator of Rim Properties, LLC; Real estate agent with The Sudar Group; Leadership council for Contractors, Closers and Connections of NWA
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I like to educate my clients that your payment can change over time based on taxes. The bank initially looks at the taxes for the previous owner when qualifying you. The taxes will increase when your new home is assessed for the amount you paid. Be prepared for the change. I don’t want you to be shocked. Message me for more info.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Christopher Arienti

Broker/Owner at RE/MAX Executive Realty
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Also make sure to choose a reputable lender whom you can trust to get your preapproval done in a timely fashion and who will carry the loan to close. A pre-underwritten pre-approval is almost a must in this market as well. And remember, the rate, loan type or other do not matter if the loan never closes!

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How do you avoid common mistakes that can delay or derail your pre-approval?

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1 Check your credit score

2 Gather your documents

3 Shop around for lenders

4 Avoid major financial changes

5 Communicate with your lender

6 Review your pre-approval letter

7 Here’s what else to consider

Working with First-Time Home Buyers

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