Getting Preapproved for a Home Loan: What Every Homebuyer Should Know

Buying a home is one of the biggest financial decisions you'll ever make. Whether you're a first-time buyer or a seasoned homeowner, one of the most important early steps in the process is getting preapproved for a home loan. Yet many buyers misunderstand what preapproval really means, when they should do it, and how much they can expect to qualify for.
In this post, Kerry Day and Caleb Janowski break down everything you need to know about mortgage preapproval so you can move forward with confidence—and avoid costly surprises along the way. Whether it's buying a home in Kitsap, Snohomish, Pierce or King county, it's important that you understand what strategies are working in Washington and elsewhere.

What Does It Mean to Get Preapproved?

Getting preapproved for a home loan means a lender has reviewed your financial information and determined how much they are willing to lend you—based on verified data, not estimates. Most real estate agents in Washington will want to verify that you're preapproved prior to going to look at homes.
During the preapproval process, a lender typically reviews:

  • Your income (pay stubs, W-2s, tax returns, or business income)
  • Your credit history and credit score
  • Your assets (bank accounts, retirement funds, investments)
  • Your debts (credit cards, auto loans, student loans)
  • Your employment history

Once this information is analyzed, the lender issues a preapproval letter, which states a loan amount you qualify for, along with the type of loan and sometimes an estimated interest rate.

Preapproval vs. Prequalification

It's important not to confuse preapproval with prequalification:

  • Prequalification is usually based on self-reported information and provides a rough estimate.
  • Preapproval involves documentation and a credit check, making it far more reliable.

From a seller's perspective, a preapproval signals that you are a serious, capable buyer. In competitive markets, it can be the difference between having your offer accepted or passed over. Did you know that the months of inventory of homes available in Washington increased by 28% in the month of January? That means there are more sellers and you'll want to make sure you put your best foot forward when making an offer.

When Should I Get Preapproved?

The short answer: before you start house hunting.
Many buyers make the mistake of browsing homes first and talking to a lender later. While it's fine to explore neighborhoods and price ranges casually, you should get preapproved before:

  • Touring homes with a real estate agent
  • Making an offer on a property
  • Falling in love with a house you may not qualify for

Ideal Timing

Most buyers should get preapproved 3–6 months before they plan to purchase. This timeline allows you to:

  • Identify and fix credit issues
  • Adjust debt levels if needed
  • Build savings for down payment and closing costs
  • Understand your realistic budget

If your credit or finances need improvement, a lender can help you create a strategy so you're in a stronger position when it's time to buy.

How Long Does a Preapproval Last?

A preapproval typically lasts 60 to 90 days, depending on the lender. After that, documents and credit may need to be refreshed. Even if it expires, updating a preapproval is usually quick—as long as your financial situation hasn't changed.

How Much Can I Get Preapproved For?

This is often the most exciting—and most misunderstood—part of the process.
The amount you're preapproved for is based on several key factors:

  • Gross monthly income
  • Debt-to-income (DTI) ratio
  • Credit score
  • Down payment amount
  • Loan program guidelines
  • Current interest rates

Debt-to-Income Ratio (DTI)

DTI is one of the most important metrics lenders use. It compares your monthly debt payments to your gross monthly income. Most loan programs allow:

  • 36–45% DTI for conventional loans
  • Up to 50% DTI for certain loan programs with strong credit

This means the lender looks at your future mortgage payment plus all other debts—then decides how much you can responsibly afford.

Maximum Approval vs. Comfortable Budget

Here's a critical point many buyers overlook:
Just because you're preapproved for a certain amount doesn't mean you should spend that much.
A lender approves you based on guidelines, not your lifestyle. You should also consider:

  • Monthly comfort level
  • Childcare, healthcare, or tuition expenses
  • Travel and lifestyle goals
  • Emergency savings
  • Future plans (family, career changes, investments)

Many buyers choose to purchase below their maximum approval to maintain financial flexibility and reduce stress.

Down Payment Matters

Your down payment affects:

  • Loan amount
  • Monthly payment
  • Mortgage insurance requirements
  • Interest rate options

A larger down payment can increase buying power and lower monthly costs, but many loan programs allow down payments as low as 3–5% (or even 0% for certain buyers).

Why Preapproval Gives You a Competitive Edge

In today's market, sellers want certainty. A preapproved buyer offers exactly that.
Benefits of being preapproved include:

  • Stronger negotiating position
  • Faster closing timelines
  • Increased credibility with sellers and agents
  • Clear price boundaries during your search
  • Reduced risk of financing delays

In multiple-offer situations, sellers often favor preapproved buyers over those who are not—even if the offer price is similar.

What Can Impact or Change My Preapproval?

Your preapproval is based on your financial snapshot at a specific moment. Changes can affect it, including:

  • Opening new credit cards
  • Taking on new debt (car, furniture, personal loans)
  • Changing jobs or income structure
  • Missing payments
  • Large undocumented deposits

Once you're preapproved, it's best to keep your finances stable until you close on your home. Always check with your lender before making financial changes.

Final Thoughts: Preapproval Is Your Foundation

Getting preapproved for a home loan isn't just a box to check—it's the foundation of a smooth, confident home-buying experience.
To recap:

  • What does it mean to get preapproved?
    A lender verifies your finances and confirms how much you qualify for.
  • When should I get preapproved?
    Before you start house hunting—ideally several months in advance.
  • How much can I get preapproved for?
    It depends on income, debt, credit, and down payment—but your comfort matters just as much as the maximum number.

A solid preapproval puts you in control, strengthens your offers, and helps you buy a home you can truly enjoy—not just afford on paper.
If you're considering buying in the near future, getting preapproved is the smartest first step you can take.