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The Mortgage Pre-Approval Process

The Mortgage Home Loan PreApproval Process Step-by-Step

The process for getting pre-approved for a mortgage is rather simple. The more you prepare…the easier it will be. The concept behind a mortgage pre-approval is to determine whether you are capable of repaying a mortgage. To make this determination ARBOR needs to review your credit history and score, employment history, current gross income, and current savings. There are hundreds of variables that can affect a person's ability to qualify for a mortgage which is why it is so important to get pre-approved. You don't want to engage in a purchase transaction only to uncover a variable that will prevent you from buying your home at the last minute. It not only could cost you your dream home but thousands of dollars as well.

Here is a break down of the mortgage pre-approval process:

Step 1: Gather and provide financial information to ARBOR

You will need to provide ARBOR with the following: Download the mortgage pre approval checklist

  • Most recent 2 years personal federal tax returns. All pages and all schedules. **
  • IF you own 25% or more of any LLC, S-Corp, Partnership etc we will need the most recent 2 years business returns (1120s, 1065s, etc) & K-1s for these entities
  • Most recent 2 years W-2s
  • Most recent paystubs to cover a 30 day period
  • Current Driver's licenses
  • 2 months banks statements for any funds that will be used for closing.
  • A complete ARBOR Mortgage Pre-Approval Loan Worksheet
  • Current credit report (we can provide for you)

If you're wondering what documents are need for a mortgage preapproval by most lenders, not just Arbor, we got you covered! The list of documents may vary depending on which lender you use, but here are the most common items needed to get your mortgage preapproval process started:

mortgage preapproval process checklist

At the time you submit your mortgage loan application, your lender will give you a complete list of the documents they need. Check with your lender if you aren't using Arbor Financial Group, there's a big chance such a list is published on their website.

Step 2: ARBOR will process and review the information you provided.

Typically this step will take 48 to 72 hours.

Step 3: Phone or personal loan consultation to narrow down pre-approval results.

After we have processed your pre-approval we will be able to advise you of your loan options.

The pre-approval consultation will review the following key points:

  • How much you can afford or your maximum purchase price.
  • Available loan programs based on your credit score, loan amount, and down payment profile.
  • Break down of your future housing payment including your mortgage payment, property taxes, home owners insurance, home owner's association dues and mortgage insurance if applicable.
  • Three interest rate and closing cost options for the program that best fits your needs.

Step 4: Pre-Approval Letter Issued

You will receive a valid pre-approval letter to be used when shopping for your home. In addition your pre-approval letter will have the contact information of your loan officer so that he or she can be contacted by any real estate agent that may have questions regarding your mortgage pre-approval.


If you're pre-approved, you can still be denied a mortgage. A pre-approval is not a final loan approval. The documentation you provide for your pre-approval typically expires every 60 to 90 days. Therefore, it is critical that you do not make any major life or financial changes until after you have purchased your home. Any significant change could jeopardize your pre-approval and your ability to obtain a mortgage.

So, please observe the following DO NOT's until you get the keys to your new home!

  1. Do not change jobs, become self-employed or quit your job.
  2. Do not buy a car, truck or van.
  3. Do not charge up credit cards or make late payments.
  4. Do not spend money you have set aside for closing.
  5. Do not omit debts or liabilities from your loan application.
  6. Do not buy furniture.
  7. Do not allow anyone other than your Lender to run your credit.
  8. Do not receive gift Funds or make large deposits without first checking with your loan officer.
  9. Do not change bank accounts.
  10. Do not co-sign a loan for anyone.


Pre-approval gives you a good idea of how much house you can reasonably afford. You can target your home search in such a way that you only consider houses that are within your price range.

A pre-approval letter also makes real estate agents and brokers more willing to deal with you. Some even require that you provide a letter of pre-approval along with your offer. Additionally, if multiple offers on a property are received, the person who provides the strongest mortgage pre-approval is likely to be considered ahead of those who don't.

Here's a list of the top 10 benefits for obtaining the home buying mortgage pre-approval letter


Usually, when working with Arbor Financial Group, if you fit our lender's guidelines, we can get you pre-qualified for a mortgage online in minutes. Once you decide to move to a full a pre-approval you can expect a processing time of up to 72 hours.


Knowing is half the battle! Even if you don't get your pre-approval you will have identified why you cannot be pre-approved. Our team of professionals understands that embarking on the road to home ownership may take some longer than others. We are committed to helping and advising our clients how to get approved for mortgage. Whether that is in the form of credit repair or savings goals you can rest assured that if you don't walk away with a pre-approval you will walk away with a plan that if followed will get you in a home.

How Can I Start The mortgage pre-approval process?

You can start the mortgage pre-approval process in 3 different ways. Choose which method is most convenient and best fits your current situation:

  1. Initial Pre-qualification: If you haven't found a home or an offer hasn't been accepted, we recommend you start with the mortgage prequalification process by getting pre-qualified for a mortgage online so you can get an instant mortgage pre-qualification letter and determine how much you can afford and whether you are able to buy a home.

  2. Pre-approval Letter: If you'd like us to provide you with a conditional mortgage pre-approval letter, you'll need to complete the mortgage pre-approval loan worksheet to get your mortgage application process started and see how much loan you can get approved for. You will have to follow it up by sending us your financial documents. Here is a checklist of what is needed to get preapproved for a mortgage through Arbor Financial Group.

  3. Final Approval: If you have already been pre-approved and you'd like to start the final application for your mortgage loan, download the uniform residential loan application complete, scan and email back to and you'll hear from a licensed mortgage banker within a few hours comfirming receipt of application. We will follow up by phone or email to request additional information if needed, otherwise we will email you a formal commitment letter within 48-72 hours.

The Whole Process – Where does the Pre-Approval Fit?

  1. Get Pre-Qualified – online or call
  2. Get Pre- Approved – online or call
  3. Find the Right Home – home search
  4. Make an Offer That's Just Right
  5. Offer is Accepted
  6. Home Inspection
  7. Home Appraisal
  8. Submit Mortgage for Final Approval
  9. Final Mortgage Approval
  10. Sign Mortgage Loan Documents and Wire Funds
  11. Get your Keys!


Contact one of our licensed mortgage agents in Orange County, California to discuss your available options in order to increase your likelihood of having your offer accepted. You can also review our mortgage calculator page if you would like more information on potential payments and options.

How can you speed up the mortgage pre-approval process?

Get Organized! Make sure your documents are in order and are digital

Before you apply for a mortgage loan in Orange County, California, make sure that you have all the documents that will be required.

Here is a checklist of what is needed to get preapproved for a mortgage:

  • Most recent 2 years personal federal tax returns. All pages and all schedules. **
  • IF you own 25% or more of any LLC, S-Corp, Partnership etc we will need the most recent 2 years business returns (1120s, 1065s, etc) & K-1s for these entities
  • Most recent 2 years W-2s
  • Most recent paystubs to cover a 30 day period
  • Current Driver's licenses
  • 2 months banks statements for any funds that will be used for closing.
  • A complete ARBOR Mortgage Pre-Approval Loan Worksheet
  • Current credit report (we can provide for you)

A best practice is to gather all the information above and save it in a PDF file format. This will save you time down the road and make things easier to approve your loan.

The 4 C's of the Mortgage Pre-Approval Lending Basics

Video by Ryan O'Kane — President at Arbor Financial Group

I want to take this time to dive in a little deeper into the mortgage pre-approval process and give you some background as to how banks will analyze your financials to determine whether or not you are suitable to get a mortgage.

Most banks lend based on what's called the 4 C's. The 4 C's stand for "Capital", "Capacity", "Character" and "Collateral".

  1. Capital simply refers to your assets. How much money do you have in the bank? This really means, will you be making a large down payment or a small down payment? And after your down payment how much money do you have left over? All of those factors determine what kind of loan you can get and whether you can get one at all. There are low down payment programs on FHA and banks who will allow you to put as little as 3% down and even that 3% down can be a gift. So there are loans out there that require little capital however, the less capital that you use the riskier it's for the bank and you'll find that those loans are more expensive than if you had more capital.

  2. The 2nd C is the Capacity and capacity simply refers to your income and your ability to actually repay the debt. Banks look to see how long you been earning your current income, how stable your job is and how much the housing payment is going to affect your total debt load. Banks are really concerned that you're able to afford the house and that there's some room there and some give if there were some changes to your financial situation.

  3. The 3rd C is Character and that refers to credit. In the banking world, the best predictor to future performance is your credit track record. What happened in the past and that's where credit scoring and credit history come into play. So all banks run a tri-merge credit report. Banks analyze your credit report with 3 bureaus and take the middle of your 3 credit scores. They are going to look at how you've repaid your debts, your revolving debts, your installment debts, mortgage debts, car loans, etc. Depending on your credit history's track record that will determine the type of mortgage home loan you'd qualify for.

  4. The 4th C really isn't something you could control, it's actually the collateral of the home and it refers to the appraisal or the value of your home. When banks lend money, they are making their decisions based on 2 things: First, to the individual you and they're also lending money against the house which is what they get if you don't pay them back. So it's very important to the bank that the appraisal is sound and the value is 100% accurate so that if in the event you're not able to pay them back and have to take the house back via foreclosure that they will be able to minimize their losses on the money that they've extended out to you.

A Must Download

During the mortgage loan preapproval process, it is extremely important that Nothing Changes in your financial world. We recommend you download the following do's & dont's of getting a mortgage home loan!

Download The White Paper

We recommend you to download the mortgage preapproval process white paper by Ryan James O'Kane