A mortgage pre-approval is a written lender commitment stating how much it is willing to lend you, based on verified income, assets, debts, and a credit check. In a competitive market like Ann Arbor, it separates a serious buyer from a tire kicker, and most sellers only weigh an offer when your financing is proven. Here is what to gather, how the process works, and the honest difference between the three kinds of approval letters.
Prerequisites: your last two years of W-2s and tax returns, 30 days of pay stubs, 60 days of bank statements, a government ID, and 1 to 3 business days of review. Cost: a hard credit pull that may dip your score a few points.
What is a mortgage pre-approval?
The lender checks your credit with a hard inquiry, verifies your income from W-2s, pay stubs, and tax returns, and confirms your assets from bank statements before it writes the letter.
That separates it from a pre-qualification, a rough estimate built from numbers you state yourself, with little or no documentation and often no hard credit check. Sellers rarely weigh it, because nothing has been verified. The Consumer Financial Protection Bureau warns that lenders use the two words loosely, so ask what was actually verified, not which label is on the letter.
The three kinds of approvals, and which one wins offers
Sorted by how much was verified, there are three levels, and each carries different weight with sellers. Pre-qualification is the lightest, an estimate built from your own stated numbers with minimal documentation and often no hard credit pull. It is fine for a ballpark six months out, but it rarely convinces a seller you can close. Pre-approval is the standard buyers carry: your income, assets, debts, and credit are verified, and the letter states the amount you are generally approved for. Verified approval, a fully underwritten review before you shop, is the strongest, so your offer competes near cash. None is a guarantee of final approval, since the property, appraisal, and title still must pass once you are under contract.
Step 1: Gather your documents
Getting pre-approved moves fast when you arrive ready. Lenders generally ask for four groups of documents: income (your last 30 days of pay stubs plus W-2 or 1099 forms from the past two years, and business and personal tax returns if you are self-employed), tax returns (signed federal returns for the past two years), assets (bank and investment statements covering the last 60 days, proving your down payment is real and sourced), and identity and debts (a government ID, Social Security number, and a full list of monthly debts, since each minimum feeds your debt-to-income ratio).
The CFPB's prepare-to-shop guide suggests creating a loan application packet before you contact a lender, so the review has nothing to wait on.
Step 2: Apply with a lender
Once your documents are ready, you fill out a mortgage application with the lender you choose. This is when the lender runs either a soft or a hard credit inquiry, which checks your official scores and full credit history across the major bureaus. A hard pull can temporarily lower your score by a few points, but mortgage shopping is protected: the CFPB says multiple credit checks from mortgage lenders within a 45 day window are recorded as a single inquiry, so comparing a few lenders is score safe.
You should now have submitted your full application and authorized the credit check, with nothing left for the lender to ask for.
Step 3: Wait for the review
Your lender reviews your file and verifies everything you submitted. Pre-approval can take a few business days once all required documentation is in, though the exact time depends on how fast you gathered your papers and how quickly your chosen lender works. On our end if we have everything we need, it should be same day.
You should now hold a pre-approval letter stating your maximum loan amount, the loan type, and the assumptions behind it, usually with an expiration date.
Step 4: Know how long your letter lasts
A pre-approval letter is a snapshot of your finances, and snapshots age. Letters stay valid for a window that varies by lender, and some are good for only a month or two. When a letter expires, the refresh is usually painless: updated pay stubs and bank statements, and a new credit pull if the old one has run out.
A good rule is to get pre-approved about one to three months before you start touring homes, not six months early, so the letter is still live when you write an offer. Even with a fresh letter, the lender re-verifies your employment, income, and credit again days before closing, and you should avoid opening new credit, financing a car, or changing jobs until you close.
1Why was my pre-approval amount lower than I expected?
The most common reason is income averaging. A lender qualifies self-employed, overtime, bonus, and commission income from a two year average on your tax returns, not from your current pace. If you stated a higher number in a pre-qualification, the verified letter can come in lower, which is exactly why the document review matters before you fall in love with a house.
2What happens if my pre-approval expires while I am still shopping?
The refresh is usually simple. You submit updated pay stubs and bank statements, and the lender runs a new credit pull if the old one has expired. Just avoid opening new credit in the meantime, since a new car loan or credit card can change your debt-to-income ratio and your approved amount.
3Should I get pre-approved with more than one lender?
Comparing a couple of lenders is reasonable, and it will not hurt your score much, since mortgage inquiries made within a 14 to 45 day window are counted as a single inquiry. The tradeoff is time, so keep your document folder ready and submit to each one in the same window.
Your next move
Pre-approval is the difference between making an offer and actually winning the house. Gather your W-2s, pay stubs, tax returns, and bank statements, pick a lender who will tell you honestly what it verified, and get your letter in hand before you tour your first home. The stronger your approval, the more seriously sellers take you, and the smoother your close will be.
Buying in Michigan? The state backs first time and lower income buyers directly. The Michigan State Housing Development Authority helped more than 6,000 Michiganders become homeowners in 2025, its highest number in a calendar year, with over $1 billion in mortgage and down payment assistance loans to 6,193 homebuyers (MSHDA). That assistance can pair with your pre-approval to stretch how much house you can afford.
Tell me where you are looking and what your timeline looks like, and we can map out exactly what your pre-approval will need.
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