Getting Approved: What Mortgage Professionals Wish You KnewGetting approved for a mortgage is one of the most important steps on your journey to homeownership—but for many first-time buyers, it can also feel like the most intimidating. To help demystify the process, we’ve gathered insights from experienced mortgage professionals on what to expect and how to prepare before applying for a mortgage.
What Is a Mortgage Pre-Approval?
A mortgage pre-approval is an estimate of the loan amount a homebuyer may qualify for based on their current financial situation. It’s recommended that you speak with a mortgage advisor before starting your home search to help set realistic expectations.
Just like any major purchase, it’s important to understand your budget ahead of time. A pre-approval or pre-qualification helps you determine what you can afford by assessing your income, expenses, and existing debt. When you’re pre-approved, a lender essentially commits to loaning you money—subject to meeting specific conditions.
Advantages of Being Pre-Approved:
- Your rate may be locked in for a set period—protecting you from potential interest rate increases.
- It shows sellers and real estate agents that you’re a serious, qualified buyer.
- You can plan long-term with clarity, knowing your estimated monthly mortgage payment.
What do lenders & brokers look at before approving someone?
Lenders and brokers typically focus on three key factors:
- Income verification to confirm your ability to meet monthly mortgage obligations
- Credit history to evaluate your repayment habits and assess risk
- Downpayment to determine your purchasing power
They may also review two debt service ratios:
- Gross Debt Service (GDS) compares your income to housing-related costs
- Total Debt Service (TDS) considers your income in relation to all monthly debt payments
As a general guideline, no more than 30% to 32% of your gross income should go toward housing expenses, including your mortgage payment, property taxes, heating costs, and condo fees, if applicable.
What should first-time buyers know about the pre-approval process?
Pre-approval involves a discovery conversation with your mortgage professional. It’s a chance to talk through your goals and determine what matters most to you in a home. This step also helps set a realistic budget, giving you confidence as you begin your search. Be sure to factor in additional monthly expenses—such as groceries, transportation, utilities, and internet—so you’re financially prepared for homeownership.
What do first-time buyers need to provide to their lender or mortgage broker?
To complete the pre-approval or application process, buyers are typically asked to provide:
- Proof of income (e.g., pay stubs or employment letters)
- Documentation of the downpayment
- Information related to the property, such as a signed purchase agreement
These are standard requirements for most lenders.
What happens if their mortgage application is declined?
Not all buyers qualify for standard financing, but that doesn’t mean your journey ends there. Some lenders may offer alternative financing solutions tailored to unique situations. A mortgage professional can help you explore other options and create a plan to move forward.
Additional Tips for First-Time Buyers
Buying your first home is an exciting milestone, and the more prepared you are, the more confident you’ll feel. Connecting with a mortgage advisor early in the process allows you to ask questions, understand your financial readiness, and act quickly when the right home comes along.
Saving for a downpayment can take time, and some buyers find success by getting creative—whether that means setting up a dedicated savings account, partnering with a co-buyer, using retirement funds, or receiving family support.
Getting approved for a mortgage is just one part of the journey. Learn how our New Home Specialists support you from search to sale, and get practical budgeting tips to help you prepare financially before you start house hunting. Together, these resources will help you move forward with clarity and confidence.