Preapproval and Why it’s Important


You’ve been searching online for the right home, cruising through neighborhoods looking for the “that’s it!” house. You’ve got to have one thing in hand before the fun begins: your preapproval letter.

Prequalified or preapproved?

Mortgage terminology can be confusing at times. One important milestone to becoming a serious buyer is fully understanding the difference between being prequalified and preapproved.

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Prequalifying means you’ve been initially screened by a lender. Usually, you will submit some basic information, and the lender will provide a rough estimate of what you might be able to afford. On the other hand, preapproval takes the preliminary loan process a step further. Additional financial information is gathered. In most instances, you will be asked to provide many of the same documents that will be required to complete the actual loan process, including tax returns, bank statements and employment verification. With a preapproval letter from your lender, real estate agents and sellers know you are a serious buyer.

This letter can be shown to sellers when bidding on a property. It proves that you already have backing and the ability to go through with the sale, which makes you a much more attractive buyer.

What documents will you need?

  • Recent bank statements and any investment accounts. (To show where the down payment monies will be coming from.)
  • Employment information, as well as recent paycheck stubs, W-2’s and tax returns for the last two years.
  • In some cases other documents will be required but this is on a case by case basis. 

Brian DiVito

​​​​o: (732) 527-0699

m: (908) 451-4517

f: (773) 357-4427

14 Main Street Suite 201, Madison, NJ 07940
NMLS ID: 274474


Keller Williams Realty - A New Generation of Positive,Professional & Tech Savvy Realtors. Keller Williams Realty is located at 188 Elm Street in Westfield and serves the communities along the train lines including Westfield, Cranford, Fanwood, Scotch Plains, Mountainside, New Providence, Berkeley Heights and the surrounding communities. Call us today at 908-233-8502

Are you considering selling your home? Take advantage of our home sales expertise and marketing experience to ensure your home is sold in reasonable time and for top dollar. Get a FREE in-depth home Value Report, and find out more about a detailed marketing plan and how it can help sell your home faster, and for top dollar.

The opinions expressed herein are the writer's alone, and do not reflect the opinions of or anyone who works for is not responsible for the accuracy of any of the information supplied by the writer.

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