Preparing For The Mortgage Pre-Approval Process | MSI Credit Solutions

Home Buyer’s Checklist: Prepare for The Pre-Approval Process

What is a Mortgage Pre-Approval and Why Do I Need One?

At this point, you have now checked your credit to ensure your credit score meets your lender's minimum requirements. We recommend at least a 620 mid-score before moving to the next step, obtaining a pre-approval. Many realtors require a pre-approval letter before assisting you with your home search. This will assist them in setting the right criteria for finding your home. ​To get pre-approved you will need to complete a loan application with a loan officer. Consumers who do not complete this step find themselves falling in love with a home they may not necessarily be able to afford. Even consumers with perfect credit may get denied a home loan. Another important factor reviewed for pre-approval will be your debt-to-income ratio.


What is a Debt-To-Income Ratio?

Your debt-to-income ratio is the percentage of your gross monthly income that goes towards paying your debts. ​Depending on the loan program you are applying for you will need to meet a certain debt-to-income ratio. ​This debt to income ratio ​​measures your ability to repay the loan you have applied for.


What Can Be Considered As Debt?

You can capture the majority of your active debts ​by checking your credit report.

  • Monthly Minimum Credit Card Payments
  • Monthly Car Payments
  • Personal Loan Payments
  • Student Loan Payments
  • Monthly Child Support/Alimony Payments​

Your lender will only add up your minimum monthly payments, not your total balance owed.


What Can Be Considered As Income?

​There are several acceptable sources of income that can be used to qualify.

  • Hourly/Salary Paychecks
  • Self-employment Income​
  • Military Income
  • Social Security Income
  • Rental​ ​Income
  • Child Support


How Can I Improve My Debt-To-Income Ratio?

Consider these two factors to secure the best debt-to-income ratio.

  1. Increase your gross total income.
    1. Raises
    2. Overtime
    3. Bonuses
    4. Write off less on your tax return
    5. Report any other second streams of verifiable income
  2. Decrease your monthly payment debt.
    1. Pay down or pay off your credit card debt
    2. Pay off installment debt in full

These changes will result with an increase to your credit score which can allow for better loan terms. Applying these changes before or during the home loan process will increase your chances for approval.


What If My Credit Doesn't Qualify for Pre-Approval?

Do you think your credit does not qualify or meet your lenders minimum requirement? If so we encourage you to consult with a credit expert like MSI Credit Solutions to learn about your options. We assist clients increase their credit scores to improve their financial future. MSI Credit Solutions leverages your consumer rights and works on your behalf to remove questionable negative items from your credit report which results in an increase to your credit scores.





MSI Credit Solutions provides superior credit restoration and comprehensive consulting services that are reliable and affordable. For any questions or to schedule a free credit consultation, contact us at (866) 217-9841.

 *The information in this article has been provided strictly for educational purposes.


Get Started Today


0 Responses

  1. […] month we covered the importance of obtaining a pre-approval. During this process your lender may require documentation to verify different financial factors. […]

Leave a comment

You must be Logged in to post a comment.