Mortgage Pre-Approval in Austin, TX

Pre-Approval vs. Pre-Qualification

These terms are often used interchangeably, but they are very different in the eyes of sellers and listing agents:

• Pre-qualification is a quick estimate based on self-reported information. No documents are verified. It tells you roughly what you might afford but carries little weight with sellers.
• Pre-approval involves a full review of your financial documents — income, assets, debts, and credit. The lender issues a letter confirming you are approved for a specific loan amount. In Austin's competitive market, this is what sellers and agents expect to see.

A strong pre-approval letter from a reputable local lender can be the difference between winning and losing a home in a multiple-offer situation.

Documents You Need for Pre-Approval

Gather these documents before you start to speed up the process:

• Income: Last 2 pay stubs, 2 years of W-2s, 2 years of federal tax returns (all pages). Self-employed borrowers also need business tax returns and a year-to-date profit and loss statement.
• Assets: Last 2 months of bank statements (all pages, all accounts), retirement account statements, investment account statements.
• Identification: Valid driver's license or government-issued photo ID, Social Security number.
• Housing history: Current landlord contact information or mortgage statement. If you own other properties, provide mortgage statements for each.
• Other debt: Student loan statements, car loan statements, credit card statements if balances are significant.

The Pre-Approval Process: Step by Step

1. Submit your application — Complete the online application at your convenience. It takes about 15-20 minutes. Start here.
2. Upload documents — Securely upload the documents listed above through the portal.
3. Credit review — Your lender pulls your credit report and scores from all three bureaus.
4. Underwriter review — A preliminary review of your income, assets, and debts to determine your qualifying amount.
5. Pre-approval letter issued — You receive a letter stating the loan amount, loan type, and terms you are approved for.

The entire process typically takes 24-48 hours once all documents are submitted. In urgent situations, same-day pre-approvals are possible.

Why Pre-Approval Matters in Austin

Austin remains one of the most competitive housing markets in Texas. Desirable neighborhoods see multiple offers within days (sometimes hours) of listing. Here is why pre-approval gives you an edge:

• Sellers take you seriously. A pre-approval letter proves you can close. Sellers and listing agents will often prioritize offers from pre-approved buyers over those without.
• You know your budget. No more guessing. You know exactly what you qualify for, which loan program fits best, and what your estimated payment will be.
• You can act fast. When you find the right home, you can submit an offer immediately without waiting for financing to be arranged.
• Realtors work harder for pre-approved buyers. Agents know that pre-approved buyers are serious and closeable, so they invest more time finding you the right property.

How Long Is a Pre-Approval Valid?

Most pre-approval letters are valid for 60-90 days. After that, updated income and asset documentation may be needed to re-verify your financial situation. Your credit inquiry is valid for 120 days, so pulling a new report is not always necessary for a renewal.

If you are not ready to buy immediately, getting pre-approved early still makes sense — it identifies any issues (credit, documentation, DTI) that you can address before you start house hunting.

Does Pre-Approval Affect Your Credit Score?

A pre-approval requires a hard credit inquiry, which typically lowers your score by 2-5 points. However, the credit bureaus treat all mortgage inquiries within a 14-45 day window as a single inquiry, so shopping multiple lenders during that period does not cause additional damage.

The minor score impact is temporary (usually recovers within 1-2 months) and is far outweighed by the benefit of knowing your exact buying power.

Common Pre-Approval Mistakes to Avoid

• Making large purchases before closing. Buying a car, furniture, or appliances before your mortgage closes can change your DTI and jeopardize your approval.
• Changing jobs. Lenders verify employment right before closing. Changing jobs can delay or derail your loan, especially if you switch industries or go from salary to commission.
• Moving money between accounts. Large, unexplained transfers trigger questions during underwriting. Keep your money where it is and document any transfers that are necessary.
• Opening or closing credit accounts. New credit applications and closed accounts both affect your score and credit profile. Hold off until after closing.
• Co-signing for someone else. A co-signed loan shows up as your debt, increasing your DTI and potentially reducing your buying power.