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Getting Pre-Approved For A Mortgage?

Jul 19, 2022
Woman in white dress shirt getting pre approved for a mortgage at CCCU.
For many, borrowing money is a key component of buying a home. But before you can finalize your mortgage, you'll need to get pre-approved for a loan.

What does this mean exactly, and how long does it take? Find answers from our local credit union below.


What is mortgage pre-approval?

Mortgage pre-approval is when a lender evaluates your creditworthiness and income to confirm whether they'll lend you money to buy a home. Once you're pre-approved, you'll get a letter with an estimate of how much you can borrow and an interest rate.

This estimate is useful for home buyers as it gives them a price range when house-hunting. However, it’s important to know that the numbers on the letter can change before everything is finalized.


Mortgage pre-qualification vs. pre-approval

Mortgage pre-qualification and pre-approval both offer lending estimates, but they're not the same thing.

  • Pre-qualification: This shows how much you can afford when buying a home and typically doesn't involve a credit check.
  • Pre-approval: This is more valuable as it signifies that the lender has reviewed your credit history, verified your finances, and is ready to move forward with a mortgage once you make an offer.
Pre-approval is valuable as it signifies that a lender has reviewed credit history, verified finances, and is ready to move forward with a mortgage.

How long does it take to get pre-approved?

After you apply, it'll usually take about a week to get a pre-approval letter. Depending on the lender, it might be as quick as a day or take a couple of weeks. For folks with poor credit, substantial tax debt, a previous foreclosure, or other factors complicating their finances, the process could be delayed by a month or two.


How long does pre-approval last?

A mortgage pre-approval letter is typically good for 60 to 90 days. If you don't make an offer on a home within this window, you'll have to re-apply.

Since pre-approval requires a hard credit check, it'll go on your credit report and stay there for two years. However, if you apply for pre-approval from multiple lenders within a 14-day period, the credit bureaus will count it as a single inquiry. This gives homebuyers leeway to shop around for lenders.


The mortgage pre-approval process involves a hard credit check.

How the mortgage pre-approval process works

The mortgage pre-approval process involves a hard credit check to evaluate your current score, credit history, outstanding balances, and derogatory remarks, such as collections or late payments.

Lenders will look at your income and compare it to the information on your credit report to determine your debt-to-income ratio (DTI). They'll also request proof of employment and information about any assets you may have.


How to get pre-approved for a home loan

Getting pre-approved for a mortgage is relatively simple compared to closing on a home. That said, the more prepared you are, the quicker and smoother the process will go.

Here's what to have on hand when you apply:
  • A front-and-back copy of your driver's license or passport
  • Your social security number
  • Bank statements for the last three months
  • Recent paystubs or proof of self-employment income Y
  • our two most recent tax returns W-2 and/or 1099 tax forms from the past two years
  • A savings account showing money for a down payment
When it comes to credit scores, most borrowers have scores in the high 600s to 700s. The higher your score, the better interest rate you'll receive. A debt-to-income ratio of below 30% is ideal, but some lenders may approve borrowers with a DTI of up to 35%.


Mortgage resources from our Oregon credit union

In addition to flexible home loans with competitively low interest rates, CCCU offers a range of mortgage resources. This includes an application checklist, guidance on pre-approval, a trusted network of realtors, and assistance with the closing process.

CCCU proudly serves members throughout the metropolitan area, including Multnomah, Yamhill, Clackamas, Columbia, Washington, Clark, Skamania, and Hood River counties. We have three physical branches in Portland and one in Hood River, convenient mobile banking, plus access to 5,600+ CO-OP Shared Branches and over 30,000 surcharge-free CO-OP ATMs nationwide!

Join our community credit union or contact our lending team to get started.