Most real estate agents expect you to have a pre-approval in-hand before they will start showing you homes. In today’s market, to have your offer even considered, sellers will expect to see that you are pre-approved. Sellers do not want to accept an offer only to find out later that the buyer does not qualify for the mortgage.

A pre-approval is the result of a thorough and complete review of your credit worthiness by your lender, and a determination that they would be willing to lend you a specified amount. The lender will consider three primary factors to determine your pre-approval amount:

  1. Your credit score: Your credit score speaks to your ability to make payments on time. It also factors into what interest rate you will get. The higher your credit score, the lower the interest rate will be.
  2. Your debt-to-income ratio: This is your monthly debt payments compared to your gross monthly income.
  3. Funds to close: There are more costs to a loan than just the down payment. Closing costs, taxes, earnest money and funding an escrow account are all factored into your total funds due at closing. Your lender will review your savings and other assets to determine your pre-approval amount.

What is the difference between a pre-approval and a pre-qualification?

A pre-qualification can be done over the phone and is simply what your financial institution thinks you can afford, based solely on the information you provided them.

A pre-approval requires a mortgage application and your financial institution will fully underwrite a pre-approval, letting you know exactly what you can afford.

A pre-qualification is a good place to start so that you have an idea of what you can afford but before you start looking for a home, you will need a full pre-approval. Get your application started at

Equal opportunity housing lender. NMLS #456945


Kira Cox

Hi, I’m Kira. I joined Verity in early 2012 after a seven-year stint as a newspaper reporter. While I never thought my career path would veer off in this direction, I am loving my time at Verity. I recently moved from being a member services representative at the Alderwood Branch to being the marketing coordinator for the credit union.

I’m originally from Texas, but I have lived all over the country and the world, including Boston, Massachusetts, Anchorage, Alaska and Sydney, Australia. But in all my travels, the Pacific Northwest is the only place that has felt like home.

When not at work, I am usually home with playing with my son, husband, dog and three cats. During the rare times I don’t have a to-do list to plow through (and it’s not raining too hard), I can be found digging in the vegetable garden, training for a half-marathon, or grilling in the backyard.

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