07/22/2025
You're finally ready to purchase a house and not sure what to do?
Getting pre-approved for a mortgage is a crucial first step in the homebuying journey. It gives you a clear understanding of your borrowing power, shows sellers you're a serious buyer, and can streamline the closing process. Most realtors won't even start showing houses without a preapproval letter.
Here's a breakdown of the top tips to make your mortgage pre-approval process smooth and successful. We're going to focus on finances today.
Want us to take a peak inside your score?
We can do a soft pull to start the conversation.
a)Improve your credit score: Lenders use your credit score to assess your creditworthiness and determine interest rates. Pay bills on time, keep credit utilization low (under 30% of your limit is ideal), and avoid opening new credit accounts before applying for a mortgage. Dave Gibson can use our internal programs to help you correct any credit issues and set you up for the best programs available.
b)Reduce your Debt-to-Income (DTI) ratio: Lenders prefer a lower DTI (ideally below 43% for most conventional loans) as it demonstrates your ability to manage monthly payments alongside existing debts. We can figure that out for you.
We can guide you with deciding how much to put down as a down payment depending on the loan program you choose.
We have FHA, VA, Conventional and USDA.
c)Establish a steady employment history: Lenders prefer borrowers with a consistent work history, ideally in the same field for at least the past two years. Avoid changing jobs or industries before applying for a mortgage if possible.
d)Avoid large deposits without documentation: Lenders will scrutinize large or irregular deposits in your bank statements, looking for potential undisclosed debts or unacceptable sources of funds. Be prepared to explain any large deposits with appropriate documentation, such as a gift letter from a family member.
There's always lots to consider before making one of the biggest investments of your life.
Call Dave to start the conversation....260-418-9355.
