Pre-approval is a crucial step that gives you a clear picture of your buying power and demonstrates to sellers that you're a qualified buyer ready to make an offer.
Types of Mortgage Loans
Different loan programs have varying requirements for credit scores, down payments, and mortgage insurance:
VA Loan
Veterans
Who Qualifies: Veterans, Personnel with honorable discharge, Reservists & National Guard, Surviving Spouses
Down Payment: NO DOWN PAYMENT
Credit Score: 620
Mortgage Insurance: NONE
USDA Loan
Rural Areas
Who Qualifies: Someone who is buying a home in a USDA-designated rural area
Down Payment: NO DOWN PAYMENT
Credit Score: 620
Mortgage Insurance: 2% of loan amount, can be rolled into loan
FHA Loan
First-Time Buyers
Who Qualifies: Anyone who meets the minimum credit and income levels
Down Payment: 3.5% (580+ credit) / 10% (500-579 credit)
Credit Score: 580+ / 500-579
Mortgage Insurance: 1.75% of loan amount
203K Loan
Fixer-Uppers
Who Qualifies: Anyone who plans to purchase a fixer-upper to renovate their home and meets credit & income requirements
Down Payment: 3.5%
Credit Score: 640
Mortgage Insurance: 1.75% of loan amount
Conventional 97
Low Down Payment
Who Qualifies: First-time home buyers (a buyer who hasn't owned in the last three years) can put 3% down with a Conventional 97 program
Down Payment: 3%
Credit Score: 620
Mortgage Insurance: Varies 3%-20% of purchase price
Conventional Loan
Standard
Who Qualifies: Anyone who meets lenders credit, income & debt requirements
Down Payment: 5-20%
Credit Score: 640
Mortgage Insurance: Required if down payment < 20%
Income Qualifications
✅ Qualifying Income
- W-2 Income/Salary
- Income from part-time jobs
- Income from a second job
- Overtime & Bonuses
- Seasonal jobs
- Self-employed Income
- Alimony & child support (Documentation required)
❌ Non-Qualifying Income
- Income from the lottery
- Gambling
- Unemployment pay
- Single bonuses
- Non-occupying co-signer income
- Unverifiable income
- Income from rental properties
Needed Documents
Document Checklist
Gather these documents before applying for pre-approval to speed up the process.
W2's from the past 2 years
3 months worth of pay-stubs
Bank statements (past 3 months)
Previous 2 years of tax returns
List of your debts & assets
Divorce decree
Additional income documents
Ready to Get Pre-Approved?
Connect with a trusted lender to start your pre-approval process and get one step closer to your dream home.