How to Get Pre-Approved for a Mortgage (And Why It’s Your First Step)
For most homebuyers, especially in a competitive market like Dallas-Fort Worth, the home search doesn’t start with browsing listings — it starts with a mortgage pre-approval. Think of it as your permission slip to shop for homes confidently and seriously.
In this post, I’ll walk you through exactly what mortgage pre-approval is, why it matters, and how to get started — even if your credit isn’t perfect or you’re not sure how much you can afford.
What Is Mortgage Pre-Approval?
Pre-approval means a lender has reviewed your income, credit, debts, and assets and given you a conditional commitment for a loan amount. It’s stronger than a prequalification — it shows sellers that you’re serious and capable of buying. It also means that as long as nothing changes in your financial position, the appraisal, homeowners insurance, and title work come back acceptable, you don’t have to worry about closing on your next home.
Four Simple Steps to Getting Pre-Approved
1. Check Your Credit Score
Start by reviewing your credit report. If there are errors or outdated accounts, now’s the time to address them. Your credit score plays a big role in determining the loan programs and interest rates you qualify for.
Here’s how you can check your credit:
- You’re entitled to a free credit report every 12 months from each of the three major credit bureaus at www.annualcreditreport.com.
- For a more detailed view of your credit — including your mortgage-specific FICO scores — I recommend using our preferred credit monitoring service through MyScoreIQ. It provides real-time updates and tools to help you improve your score over time.
Use my referral link here to get started:
MyScoreIQ Mortgage Credit Report Access
Whether you’re just starting or need help rebuilding, understanding your credit is the first step toward getting pre-approved.
2. Calculate Your Budget
Knowing what you feel comfortable spending and what you actually qualify for aren’t always the same — but both are important. Lenders look at your debt-to-income ratio (DTI) to determine how much you can afford, while you want to make sure your monthly payment fits your lifestyle and future plans.
Let’s walk through both the housing payment estimate and how to figure out your total DTI.
Step 1: Estimate Your Total Monthly Housing Payment
Your housing payment (often called PITI) includes:
- P = Principal (your loan amount)
- I = Interest (your mortgage rate)
- T = Taxes (property taxes)
- I = Insurance (homeowners and possibly mortgage insurance)
Here’s a quick way to estimate:
Example:
You’re looking at a $350,000 home with 3.5% down on an FHA loan. That makes your loan amount about $337,750.
Let’s say:
- Interest rate is 6.5%
- Property taxes are 2.5% of the home value
- Homeowner’s insurance is around $100/month
- FHA mortgage insurance is required
Your estimated monthly costs would be:
- Principal & Interest: ~$2,137/month (use a mortgage calculator or ask me for a custom estimate)
- Taxes: ~$729/month
- Homeowner’s Insurance: ~$100/month
- Mortgage Insurance (FHA): ~$240/month
Estimated total monthly payment = $3,206/month
This is just an estimate. I can run real numbers for your income, down payment, and property taxes in your specific area.
Step 2: Calculate Your Debt-to-Income Ratio (DTI)
There are two types of DTI lenders consider:
- Front-End DTI: Your housing payment divided by gross monthly income
- Back-End DTI: Your total monthly debts (including housing) divided by gross monthly income
How to calculate your back-end DTI:
- Add up all your monthly debt payments:
- Minimum credit card payments
- Student loans
- Auto loans
- Personal loans
- Any alimony or child support
- Estimated housing payment (PITI)
- Divide that total by your gross monthly income (before taxes).
Example:
Let’s say you make $108,000/year = $9,000/month
Debts:
- Car loan: $400
- Student loan: $250
- Credit cards: $100
- Estimated housing payment: $2,500
Total debts = $3,250
$3,250 ÷ $9,000 = 36% DTI
What’s the Ideal DTI?
- FHA typically allows up to 43% to 50% DTI, depending on compensating factors like strong reserves or a high credit score.
- Conventional loans prefer under 45% but exceptions apply.
- VA and USDA use different guidelines, but I can help navigate those if you qualify.
Knowing your estimated DTI helps you set realistic expectations and makes the pre-approval process smoother. If you’re not sure how to calculate it or need help finding the right loan program, I’m happy to walk through it with you.
3. Gather Your Financial Documents
Have these handy:
- Most recent 30 days of pay stubs
- The last 2 years of W-2s and tax returns ( you will only need tax returns if you are self-employed or have rental properties)
- The last 2 months of your bank statements and retirement account statements
- Your state issued ID
4. Shop Lenders (But Start with Me)
Not all lenders are created equal. As a member of the nation’s largest mortgage broker, I compare rates and products across multiple lenders, 260 of them are competing for my loans so you save! — and unlike banks, I don’t charge you underwriting or processing fees, saving you thousands at closing.
What Does “Shopping a Lender” Really Mean?
When you’re buying a home, people often say, “Make sure you shop around for the best rate.” That’s good advice — but most people don’t actually know what that means or how to do it effectively.
Here’s the truth: Shopping a lender means getting a fully itemized quote based on your actual scenario — not just asking about today’s advertised rate.
Why the Advertised Rate Isn’t the Whole Story
Online lenders and big banks often promote super-low rates. But those rates usually:
- Require perfect credit
- Come with discount points (you pay extra upfront)
- Don’t include fees like underwriting or processing
- Might not reflect real-time market conditions
If you just call a lender and say, “What’s your rate today?” you’re only getting a surface-level answer — and one that may not apply to your unique situation.
What You Really Need to Ask For
When shopping lenders, ask for a Loan Estimate (or at least a detailed quote) that includes:
- Interest Rate – What is the actual rate based on your credit score and loan type?
- APR – This includes fees and gives a better apples-to-apples comparison.
- Loan Type and Terms – Are you comparing a 30-year fixed FHA to a 30-year fixed FHA? Make sure it’s the same product.
- Lender Fees – Are there origination, underwriting, or processing fees? These vary greatly.
- Credits or Points – Are you paying discount points to get that rate? Or is the lender giving you credits?
Why It Matters
A low rate with high fees could cost you more than a slightly higher rate with no fees — especially if you’re not staying in the home long-term. You want the best combination of rate, fees, and flexibility for your goals.
How I Make It Easier
As a mortgage broker, I do the shopping for you. I have access to dozens of lenders, so I can compare real pricing across the market — not just from one company. Plus, I don’t charge junk fees like underwriting or processing, which keeps your cash-to-close lower.
If you’re serious about buying and want a custom, transparent quote that’s built around your goals, I’ll make sure you get the truth — not just a teaser rate.
Ready to see your real numbers? Call me at (214) 945-1066 or get started online here.
Why It’s Worth It
With a pre-approval in hand:
- You’ll know your price range
- Sellers will take your offers seriously
- You’ll move faster when you find the right home
And remember — this is not a commitment. It’s a tool that empowers you to make informed choices and negotiate from a position of strength.
Ready to Get Started?
If you’re in the DFW area and thinking about buying a home this year, let’s chat. I’ll make the process simple, stress-free, and smart.
Call or Text: (214) 945-1066
