In Las Vegas and Henderson, many buyers hear they need a pre-approval letter before looking for homes. This letter shows sellers you’re serious, prepared, and financially qualified to purchase. In a competitive market, it can make the difference between winning and losing your dream home.
Still, many buyers misunderstand what a pre-approval really means. Some think it’s a simple credit check or a quick conversation with a lender. In reality, pre-approval involves a detailed financial review to ensure you can afford the mortgage you’re applying for.
In this guide, we’ll explain what lenders actually check before issuing a pre-approval letter, why it matters, and how Drennen Home Loans helps make the process fast, simple, and stress-free for buyers across Nevada.
What Is a Pre-Approval Letter?
A pre-approval letter is a lender’s written confirmation that you qualify for a specific loan amount. It goes beyond pre-qualification by verifying your financial background in detail. Pre-approval gives you real buying power and helps sellers take your offer seriously.
- Verifies income and employment. Lenders review pay stubs, W-2s, or business income to confirm that your earnings are consistent and reliable. Stable employment history increases your chances of approval.
- Checks credit history. Your credit report shows how you manage debt and payments. Lenders use this to assess your reliability and to set your interest rate.
- Reviews debts and liabilities. They calculate how much of your income goes toward monthly obligations such as car loans, credit cards, or student debt.
- Evaluates savings and assets. Lenders review your bank statements and investments to confirm you have enough for a down payment and reserves.
- Confirms loan amount and term. Based on your income, credit, and debt, the lender determines how much you can safely borrow.
Together, these steps give a clear picture of your financial health. A pre-approval letter tells both you and the seller that you’re ready to move forward confidently. For more information, you can visit our Mortgage FAQs to see what lenders typically review.
What Lenders Look For
When you apply for pre-approval, lenders review several key areas to understand your full financial picture. Knowing these categories ahead of time helps you prepare with confidence.
Credit Score and History
Your credit score reflects how well you manage debt and payments. Lenders look for consistent on-time payments, low credit usage, and limited new inquiries. Higher scores often lead to lower interest rates and better loan terms. Even if your credit isn’t perfect, improving it before applying can make a big difference.
Maintaining responsible credit habits also shows lenders that you can handle long-term financial commitments. Checking your report for errors and paying down balances are simple ways to improve your score before you start the pre-approval process.
Debt-to-Income Ratio (DTI)
Your debt-to-income ratio measures how much of your monthly income goes toward debt payments. Lenders use this number to ensure you can manage both your existing debts and a new mortgage. A lower DTI means you have more financial flexibility and are less risky to lend to.
If your DTI is high, paying off small debts or consolidating balances can help improve your chances. Drennen Home Loans reviews each case individually to find programs that best match your financial situation.
Employment and Income Stability
Lenders want to see steady income and a reliable employment history. Typically, two years of consistent work or self-employment is preferred. They verify this information using pay stubs, W-2 forms, or tax returns. Self-employed applicants may also provide business records to confirm stable earnings.
Strong income stability gives lenders confidence that you can handle mortgage payments comfortably. Drennen’s Mortgage Team helps buyers organize and verify documents before applying to ensure a smooth review process.
Knowing what lenders review helps you strengthen your application. It also reduces surprises during final approval and keeps your timeline on track.
How to Get Pre-Approved
The pre-approval process may sound complicated, but with preparation, it’s quick and straightforward. Taking these simple steps will help you get approved faster and with fewer delays.
Gather Your Documents
Start by collecting key financial records such as pay stubs, W-2s, bank statements, and tax returns. Having these documents ready allows your lender to verify income and assets immediately. For self-employed buyers, profit-and-loss statements or 1099 forms may also be required.
Submit Your Application
Once your documents are ready, complete a mortgage application with accurate information about your income, debts, and goals. Your loan officer will review the form and may request clarification or additional documentation. Being honest and detailed helps avoid issues later in the process.
Receive Your Pre-Approval Letter
After review, the lender provides a letter showing your approved loan amount and term. This letter is typically valid for 60 to 90 days, giving you time to shop confidently for homes within your budget. If rates or financial conditions change, you can update it easily.
Preparation helps ensure faster approval and less stress. To start your application online, visit our Apply for a Mortgage page and get pre-approved with support from our local team.
Common Pre-Approval Mistakes to Avoid
Even well-qualified buyers can run into problems during pre-approval. Avoiding these common mistakes will help you move through the process smoothly.
- Changing jobs mid-process. Lenders verify employment and income during review. Changing jobs or switching from a salary to contract work can delay approval or lower your loan amount.
- Applying for new credit. Opening credit cards or financing cars increases your debt and can temporarily drop your credit score. Wait until after closing to make new credit moves.
- Large, unexplained deposits. Sudden deposits raise questions about where the funds came from. Always document transfers or gifts to show they’re legitimate.
- Missing document deadlines. Pre-approval requires timely paperwork. Delays in sending pay stubs or statements can slow down your file and impact your timeline.
- Ignoring communication from your lender. Stay in touch with your loan officer and respond quickly to requests. Good communication keeps your application moving forward.
Avoiding these errors helps you stay pre-approved and ready to buy when you find the right home. Read how other buyers completed their pre-approval journey in our Client Testimonials.
Ready to Get Pre-Approved with Confidence?
Getting pre-approved is the first major step toward owning a home. It gives you a clear budget, shows sellers you’re serious, and helps you act fast when you find the perfect property. At Drennen Home Loans, we make pre-approval simple, transparent, and personalized for every buyer. Our local team reviews your financial details carefully so you can shop with complete confidence.
📞 Want to start your pre-approval today?
Visit our Contact a Loan Officer page, let’s review your goals and get you approved 🏡
