10 Things to Know About Your Mortgage & Loan Approval

1. Lenders will check your credit score and history to determine loan eligibility and rates.

2. You must provide income documents (W-2s, tax returns, pay stubs) to verify your ability to repay.

3. Bank statements for the last 2–3 months are required to prove you have funds for down payment and reserves.

4. Avoid large purchases or new credit during the process — this can impact your debt-to-income ratio and approval.

5. Lenders will look at your debt-to-income (DTI) ratio, which compares your monthly debts to your income.

6. A preapproval means the lender has conditionally approved you based on your financial info, but it’s not final.

7. The loan application happens once you have a signed purchase contract and starts the formal underwriting process.

8. The lender will order an appraisal to confirm the home’s value matches the purchase price.

9. The underwriting process verifies all documents and decides on final loan approval.

10. Be prepared to pay closing costs, which usually run between 2% to 5% of the home’s purchase price. These include:

• Loan origination and underwriting fees

• Appraisal fee, Prepaid property taxes and homeowners insurance

• Title search and title insurance

• Credit report fee, Recording and transfer taxes, closing fees

 

Home Search Parameters Checklist (Ready to Start Looking)

1. Confirm your preapproval letter is current and ready to submit with offers

2. Know your max purchase price and target monthly payment

3. Choose your preferred neighborhoods or ZIP codes

4. Decide on home type: single-family, condo, townhouse, etc.

5. List your must-have features (e.g. 3 beds, 2 baths, garage)

6. Identify your nice-to-have features (e.g. fenced yard, home office)

7. Consider school districts if they matter to your situation

8. Determine max commute time or distance to key places

9. Understand HOA (Homeowners' Association) fees or rules (if applicable)

10. Define your ideal move-in timeframe