Mortgage Pre-Approval Guide
What lenders look for, and how to prepare · Alaska Dream Homes
Getting pre-approved early gives you a clear budget and makes your offer far stronger. Here’s what lenders look for and how to prepare with confidence.
01Pre-Qualification vs. Pre-Approval
Pre-qualification is a quick, informal estimate of what you might be able to borrow, based on information you share. Pre-approval is more thorough — a lender verifies your income, assets, and credit, then issues a letter stating how much they’ll lend.
For a competitive offer, aim for full pre-approval. Sellers take it far more seriously than a pre-qualification.
02Documents to Gather
Having these ready speeds the process considerably:
- Recent pay stubs (about the last 30 days)
- W-2s and tax returns (typically the last 2 years)
- Recent bank and asset statements
- Government-issued photo ID
- Details of debts and monthly obligations
- Self-employed? Add profit/loss statements and 1099s
03What Lenders Look At
Lenders weigh a few key factors together:
- Credit — your score and payment history.
- Income & DTI — your debt-to-income ratio shows how much of your income goes to debt.
- Assets — funds for your down payment and reserves.
- Employment — stable, verifiable income.
04Steps to Get Pre-Approved
- Check your credit and correct any errors
- Choose a licensed lender (we can suggest local options)
- Submit your application and documents
- Receive your pre-approval letter
- Keep your finances stable until closing
05Alaska Loan Programs
Beyond conventional, FHA, and VA loans, Alaska buyers have local options worth exploring:
- AHFC — the Alaska Housing Finance Corporation offers first-time buyer and other assistance programs.
- USDA / Rural — financing for eligible rural Alaska properties, sometimes with no down payment.
- VA — for eligible veterans and service members, often with no down payment.
06Common Mistakes to Avoid
- Skipping pre-approval and shopping blind.
- Making large purchases or opening new credit before closing.
- Changing jobs mid-process without telling your lender.
- Forgetting to budget for closing costs, taxes, and insurance.