Mortgage Pre-Approval Calculator

How to use this mortgage pre-approval calculator

This free mortgage pre-approval calculator estimates the maximum home price and loan amount a lender is likely to approve, based on your income, debts, rate, and down payment. It runs entirely in your browser, needs no personal information, and never touches your credit, so you can explore your buying power privately before you ever talk to a lender. Enter a few numbers and it works exactly the way an underwriter does, backward from your income to a maximum you can borrow.

• Gross monthly income: your total pre-tax income from all documented sources, salary, self-employment, and stable bonuses or side income.
• Monthly debt payments: the minimums on your credit cards, auto loans, and student loans.
• Interest rate: your quoted rate, or today's average.
• Down payment: the cash you can put toward the purchase.
• Max DTI: the debt-to-income limit to apply, 36% for a conservative estimate, 43% for a typical ceiling, or 50% for FHA-style stretch.

The results show your estimated maximum loan amount and maximum home price. Because it starts from your income and subtracts your existing debts and an allowance for taxes and insurance, the figure reflects what a lender would actually offer, not just a rosy round number. Treat it as a realistic pre-qualification estimate to guide your search, then confirm affordability with a payment you would be comfortable making.

What is a mortgage pre-approval?

A mortgage pre-approval is a lender's conditional commitment to lend you a specific amount, issued after the lender reviews your income, assets, debts, and credit. It is stronger than a casual estimate because the lender has actually verified your financial picture and put a number in writing, usually in a pre-approval letter you can show to sellers and agents.

Pre-approval matters for two reasons. First, it tells you your real budget, the price range you can genuinely shop in, so you do not waste time on homes you cannot finance or overlook ones you can. Second, it makes your offer credible. In a competitive market, sellers often will not even consider an offer without a pre-approval letter, because it signals you can close. A buyer with pre-approval looks serious and low-risk; one without it looks like a gamble.

This calculator produces a pre-qualification-style estimate, the same math a lender uses, so you know your likely range before you apply. It is the ideal first step: private, instant, and free, with no credit pull. Once you know your number here and are ready to make offers, you take the same figures to a lender to turn the estimate into an official pre-approval letter.

How does a mortgage pre-approval calculator work?

A pre-approval calculator works backward from your income to a maximum loan, following the exact logic a lender's underwriting uses. Understanding the steps makes the result meaningful rather than magical.

Step 1: Apply a debt-to-income ceiling

The calculator multiplies your gross monthly income by a maximum debt-to-income ratio (commonly 43%). That produces the total monthly amount you are allowed to spend on all debts combined, housing plus everything else.

Step 2: Subtract your existing debts

It then subtracts your current monthly debt payments, car loans, student loans, credit-card minimums, leaving the amount available for your future housing payment.

Step 3: Carve out taxes and insurance

From that housing budget it reserves a portion for property taxes, homeowners insurance, and any mortgage insurance, leaving the amount available for principal and interest.

Step 4: Convert to a loan and price

Finally, using your interest rate and a 30-year term, it converts that principal-and-interest budget into a maximum loan amount, then adds your down payment to give a maximum home price.

The whole chain is why a pre-approval calculator is more honest than a simple "income times four" rule: it accounts for your actual debts, your rate, and the ongoing costs of ownership. Check the underlying ratio with our DTI calculator to see the same math from the other direction.

Pre-qualification vs pre-approval vs prequalification

These terms cause endless confusion, and lenders do not all use them the same way, so it helps to define them clearly. The difference is essentially how much the lender has verified.

• Pre-qualification (or prequalification) is a quick, informal estimate based on figures you state. Nothing is verified, and it may involve only a soft credit check or none at all. It is a useful starting gauge, and it is what this calculator produces, but it carries little weight with sellers.
• Pre-approval is a lender's conditional commitment after reviewing documentation, pay stubs, W-2s or tax returns, bank statements, and a credit pull. A pre-approval letter is far more convincing because the lender has checked your file.
• Underwritten (or verified) approval goes further still, with a full underwriting review before you even find a home, making your offer nearly as strong as cash.

Some lenders, including credit unions like Navy Federal, use "prequalification" for their first-step estimate and "pre-approval" for the verified letter, while others blur the two. When comparing lenders, ask exactly what they verified, that, not the label, determines how much a seller will trust it. Start with a private estimate here, then pursue a verified pre-approval when you are ready to make offers.

How much income do you need to qualify for a mortgage?

The most common pre-approval question is how much you need to earn to qualify for a given mortgage. The table below shows a representative estimate of the income needed for several loan amounts, assuming a 6.5% rate, a 30-year term, roughly 20% down, and property taxes and insurance of about 1.4% of value per year. The two income columns bracket the realistic range: a comfortable figure using the 28% housing rule, and a maximum-stretch figure using a 43% DTI with minimal other debt.

These are illustrative, not promises, your rate, down payment, property taxes, and existing debts move the numbers significantly. Higher other debts raise the income you need; a lower rate or bigger down payment lowers it. Use the table to orient yourself, then enter your own figures in the calculator above for a number tailored to your situation. The sections that follow answer the specific dollar amounts people search for most.

How much do you need to earn to qualify for a $300,000 mortgage?

For a $300,000 mortgage at about a 6.5% rate on a 30-year term, the monthly payment including taxes and insurance runs roughly $2,300 to $2,350. To carry that comfortably under the 28% housing rule, you would want a gross income of about $100,000 a year. If you stretch to a 43% debt-to-income ratio and carry little other debt, you could qualify with as little as about $65,000.

So the honest answer is a range: most buyers need somewhere between $65,000 and $100,000 to qualify for a $300,000 mortgage, with the exact figure depending on your other debts, your down payment, and the rate you lock. Someone with a car loan and student loans needs to be near the top of that range; someone debt-free can qualify near the bottom.

Remember that qualifying and being comfortable are different things. You may be approved at the lower income, but the payment will consume a large share of your take-home pay. Aim for the higher end if you want room for savings, emergencies, and the real costs of ownership. Enter your income and debts in the calculator to see exactly where a $300,000 loan falls for you.

What salary do you need for a $500,000 mortgage?

A $500,000 mortgage is a large loan, and the income to support it rises accordingly. At about 6.5% over 30 years, the payment including taxes and insurance is roughly $3,850 to $3,950 a month. Under the comfortable 28% rule, that points to a salary of about $167,000 a year; stretched to a 43% DTI with minimal other debt, you could qualify with around $108,000.

The practical range for a $500,000 mortgage is therefore roughly $108,000 to $167,000. Because the payment is so large, other debts matter even more here, a couple of hundred dollars in car and card payments can push the required income up by ten thousand dollars or more. A substantial down payment (which lowers the loan) or a lower interest rate can meaningfully reduce the salary needed.

At this loan size, most buyers are dual-income households or high earners, and lenders scrutinize reserves and job stability closely. If a $500,000 mortgage is your target, focus on keeping other debts near zero and your credit strong, both widen the gap between what you can borrow and what you comfortably should. Model it with your real numbers in the calculator above.

How much income do you need for a $400,000 mortgage?

For a $400,000 mortgage at roughly 6.5% over 30 years, expect a monthly payment near $3,100 including taxes and insurance. The comfortable 28% income is about $133,000 a year, while the maximum-stretch figure at a 43% DTI with little other debt is around $87,000.

That gives a working range of about $87,000 to $133,000 to qualify for a $400,000 mortgage. As always, existing debt is the swing factor: a buyer with a $500-a-month car payment needs noticeably more income than a debt-free buyer for the same loan. A larger down payment reduces the loan and therefore the income required.

A useful way to think about it: the lower end of the range is what gets you approved, and the higher end is what keeps you comfortable. If your income sits near the bottom of the range, be conservative with the rest of your budget; if it is near the top, you will have healthy breathing room. Run your own income and debts through the calculator to pin down the number for a $400,000 loan.

How much do you need to make to get pre-approved for a $250,000 mortgage?

A $250,000 mortgage is among the more attainable loan sizes. At about 6.5% over 30 years, the payment including taxes and insurance is roughly $1,900 to $1,950 a month. Under the comfortable 28% rule you would want about $83,000 a year, and at a 43% DTI with minimal other debt you could get pre-approved with as little as about $54,000.

So most buyers need between $54,000 and $83,000 to be pre-approved for a $250,000 mortgage. This range puts homeownership within reach for many single earners and most dual-income households, especially in affordable markets where $250,000 buys a solid home. FHA financing, which allows a DTI up to about 50%, can lower the required income further for buyers who qualify.

Because this loan size is accessible, the deciding factors are often credit score and existing debt rather than raw income. Clean up revolving balances and keep your credit strong, and a $250,000 pre-approval is realistic on a middle-class income. Enter your figures above to confirm where you stand.

How much loan can I qualify for based on my salary?

Flipping the question around, buyers often want to know how much loan a given salary supports. A quick rule of thumb is that you can typically borrow about four to four-and-a-half times your gross annual income, though the real number depends heavily on your debts, rate, and down payment.

On a $75,000 salary, that rough guide points to a loan around $300,000 to $340,000; on $100,000, roughly $400,000 to $450,000; on $150,000, about $600,000 to $675,000. These are ballpark figures, the income multiple shrinks if you carry significant debt or rates are high, and grows if you are debt-free with a strong down payment.

The reason a simple multiple is only a starting point is that lenders qualify you on monthly cash flow, not a headline salary. Two people earning $100,000 can qualify for very different loans if one has a $600 car payment and the other has none. That is exactly why this calculator asks for your debts and rate rather than just your income, it produces a figure specific to your situation instead of a generic multiple. Enter your salary as monthly income and your real debts to see your true maximum.

Free pre-approval estimate based on salary

Many buyers specifically want a free pre-approval calculator based on salary, a way to see their buying power from income alone without paperwork or cost. This tool is exactly that: enter your income (as a monthly figure), add your debts and a rate, and it returns your estimated maximum loan and price instantly, at no cost and with no signup.

The one adjustment to make is converting salary to monthly income: divide your annual salary by 12. A $90,000 salary is $7,500 a month. If you have other income, bonuses, a partner's salary, documented side income, add it in, since lenders count all stable, provable income.

A salary-based estimate is genuinely useful for planning, but keep its limits in mind. It cannot see your credit score, your full debt picture, or the specific loan program you will use, all of which a lender factors in. Treat the result as a well-grounded starting range, then get an official pre-approval when you are ready to shop. Because this calculator is free and private, you can run as many salary scenarios as you like, a raise, a second income, a different down payment, to see how each changes your budget.

Is there a no-credit-check pre-approval calculator?

Searches for a no-credit-check mortgage pre-approval are common, and the honest distinction is between a calculator and an actual pre-approval. A calculator like this one needs no credit check at all, it estimates your buying power purely from the income, debt, and rate figures you enter, and it never pulls your credit or asks for personal information.

A real, lender-issued pre-approval, however, almost always involves a credit check, because the lender must verify your creditworthiness to commit to a loan amount and rate. There is no way around this for an official pre-approval letter: the credit pull is how the lender confirms your history and prices your loan. The good news is that a mortgage credit inquiry has only a small, temporary effect on your score, and multiple mortgage inquiries within a short shopping window are treated as one.

So if your goal is to explore your budget privately without affecting your credit, a calculator is the right tool, use this one freely. If your goal is a letter that sellers will accept, you will need a lender and a credit check. The smart sequence is to plan here with no credit impact, then apply for the verified pre-approval only when you are actually ready to make offers, so the inquiry happens at the right time.

Pre-approval for first-time home buyers

For first-time home buyers, pre-approval is especially valuable because it turns a vague dream into a concrete budget and a credible offer. If you have never bought before, getting pre-approved early demystifies the process and prevents the two classic first-timer mistakes: falling in love with homes you cannot afford, or lowballing your own budget out of uncertainty.

First-time buyers often qualify for programs that stretch their buying power, which changes the pre-approval math. FHA loans allow down payments as low as 3.5% and a DTI up to about 50%, so a first-timer can often be pre-approved for more than a conventional loan would allow. Many states and cities also offer down-payment assistance that effectively raises your budget. Model an FHA scenario with our FHA mortgage calculator to compare.

The practical first-timer path is: estimate your range here for free, choose a comfortable target below your maximum, then get an official pre-approval from a lender who handles first-time-buyer and FHA programs. Because your credit and debts drive the number, first-time buyers should also check their credit early and pay down revolving balances, small improvements can meaningfully raise your pre-approval amount.

Navy Federal and comparing lender pre-approvals

Many buyers search specifically for a Navy Federal mortgage pre-approval or prequalification, and it is a good example of how lenders differ. Navy Federal Credit Union, which serves military members and their families, offers both a quick prequalification and a verified pre-approval, and like many credit unions it is known for competitive rates and programs such as no-down-payment options for eligible members.

The broader lesson is that pre-approval amounts and terms vary by lender, so it pays to compare. Two lenders can approve you for different amounts because they weigh compensating factors, count income, and apply overlays differently. A credit union, a big bank, and an online lender may all quote different maximums and rates for the same borrower. Getting pre-approved with more than one lender, within a short window so the credit inquiries count as one, lets you compare real offers.

Whatever lender you choose, the estimate from this calculator gives you a neutral baseline to judge their offers against. If a lender approves you for far more than your comfortable number here, treat that as a ceiling to stay below, not a target to hit. Use the free estimate to walk into any lender, Navy Federal or otherwise, already knowing roughly what you should qualify for.

Which pre-approval calculator should you use?

Search results are full of pre-approval calculators, and readers reasonably ask which one to trust. The best pre-approval calculators share a few traits, and knowing them helps you judge any tool, including this one.

A good calculator asks for your debts, not just your income, because monthly cash flow, not a headline salary, determines what you qualify for. It lets you set the interest rate, since the rate hugely affects how much loan a payment supports. It exposes the DTI limit so you can see the difference between a conservative and a maximum estimate. And it separates the maximum you can borrow from the amount you comfortably should. Tools that ask only for your salary and spit out a big number ignore the very factors lenders care about most.

This calculator is built around that honest approach, it works backward from income the way underwriting does, accounts for your debts and rate, and lets you choose the DTI ceiling. It is free, private, and requires no credit check or personal details. For the most complete picture, pair it with our DTI calculator to check your ratio and our mortgage calculator to test the actual monthly payment before you commit.

What are the downsides of a pre-approval calculator?

A pre-approval calculator is a powerful planning tool, but it is honest to acknowledge its limits so you do not lean on it for more than it can do. Knowing the downsides makes you use it wisely.

• It is an estimate, not a commitment. A calculator cannot issue a letter a seller will accept; only a lender can, after verifying your file.
• It cannot see your credit score. Your score affects both your rate and your approval, and a calculator has to assume rather than know it.
• It uses simplified assumptions. Real underwriting weighs reserves, employment history, property type, and loan-program overlays that a quick tool cannot fully capture.
• Garbage in, garbage out. If you enter optimistic income or forget debts, the result will overstate what you can borrow.
• It can tempt overborrowing. Seeing a large maximum can nudge buyers toward the ceiling rather than a comfortable payment.

None of these make the tool less useful, they just define its role. A calculator is the right instrument for private, instant planning and for comparing scenarios; a lender pre-approval is the right instrument for making offers. Use this one to find your realistic range and to walk into a lender informed, then let the lender turn the estimate into an official approval.

Documents you need for a mortgage pre-approval

When you move from a calculator estimate to an official pre-approval, the lender will verify everything, so having your documents ready speeds the process. Gathering them early also helps you enter accurate numbers in the calculator.

• Proof of income: recent pay stubs (usually 30 days), W-2s for the past two years, and, for the self-employed, two years of tax returns and often a year-to-date profit-and-loss statement.
• Proof of assets: bank and investment statements showing your down payment and reserves.
• Identification: a government-issued ID and your Social Security number for the credit check.
• Debt details: statements for auto loans, student loans, and other obligations the lender will count.
• Additional documents as needed: rental history, gift-fund letters, or divorce and child-support records where relevant.

The cleaner and more complete your documentation, the smoother and faster your pre-approval, and sometimes the stronger your terms. Because lenders re-verify before closing, keep these documents current and avoid major financial changes between pre-approval and settlement.

How long does a pre-approval last, and does it hurt your credit?

Two practical questions come up constantly, and both have reassuring answers. A pre-approval letter typically lasts 60 to 90 days, because the income and credit data behind it go stale. If your home search runs longer, the lender can refresh the pre-approval with updated documents, usually a quick process.

As for credit impact, an official pre-approval involves a hard credit inquiry, which can lower your score by a few points temporarily. The effect is small and short-lived, and, importantly, the scoring formulas treat multiple mortgage inquiries within a focused shopping window (typically 14 to 45 days) as a single inquiry. That means you can and should compare several lenders without meaningful additional damage to your score.

The takeaway is not to fear the credit check, but to time it well. Do your private planning with this calculator, which never touches your credit, then cluster your actual lender applications close together when you are ready to buy. That way your pre-approval is fresh when you make offers, and the credit inquiries are minimized and grouped. Avoid opening new credit or financing big purchases during this window, since lenders re-check before closing.

How to strengthen your pre-approval and qualify for more

If the calculator shows less than you hoped, several concrete moves can raise your pre-approval amount, or win you a better rate at the same amount. Each works by improving one of the factors underwriting weighs.

• Lower your debt. Paying down credit cards and small loans reduces your DTI and directly increases how much you can borrow, often the fastest lever.
• Raise your credit score. A higher score can unlock a lower rate, which increases the loan a given payment supports, and can lift approval limits.
• Increase your down payment. More cash down means a smaller loan for the same home, and can remove mortgage insurance, freeing budget for principal and interest.
• Document all income. Bonuses, commissions, overtime, and side income count if you can show a stable history, usually two years.
• Add a co-borrower. A partner's income can raise your maximum, as long as their debts and credit help rather than hurt.
• Shop the rate. A lower rate from a competing lender increases your buying power without changing anything else.

Because these levers compound, tackling two or three at once, say, paying down a card while documenting bonus income and shopping the rate, can raise your pre-approval meaningfully. Re-run the calculator after each change to see the effect before you apply.

Common pre-approval mistakes to avoid

A handful of mistakes routinely trip up buyers between pre-approval and closing. Avoiding them protects both your approval and your budget.

• Borrowing to the maximum. The ceiling ignores expenses lenders do not count; aim for a comfortable payment, not the top of your approval.
• Taking on new debt. Financing a car or furniture after pre-approval can raise your DTI and void the approval when the lender re-checks.
• Changing jobs mid-process. A new job, especially in a different field or self-employment, can disrupt income verification.
• Making large, undocumented deposits. Big unexplained deposits raise questions about the source of funds; keep your accounts clean and traceable.
• Skipping the comparison. Accepting the first lender's number can cost you a better rate or a higher approval elsewhere.
• Letting the pre-approval expire. If your search runs long, refresh it so it stays valid when you make an offer.

The theme is stability: from pre-approval to closing, keep your income, debts, and accounts as steady as possible. The calculator helps you plan the right target; disciplined behavior afterward keeps that approval intact through to the keys.

How much house can you afford on your salary?

Turning income into a home price is the flip side of pre-approval, and a table makes it concrete. The figures below assume a 6.5% rate, a 30-year term, about $300 a month in other debts, a 36% DTI, and roughly 20% down. They show the approximate maximum loan and home price at several salary levels.

These are representative, not guarantees. More other debt lowers every figure; less debt, a bigger down payment, or a lower rate raises them. Notice how much the down payment matters: the home price exceeds the loan by the cash you bring. Enter your own salary as monthly income in the calculator to replace these round numbers with a figure built on your actual debts and rate.

How your down payment changes your pre-approval

The down payment plays two roles in pre-approval, and buyers often underestimate the second. The obvious role is that it directly raises your maximum home price, every dollar you put down is a dollar of price on top of the loan you qualify for. Qualify for a $300,000 loan and put $60,000 down, and you can buy a $360,000 home.

The subtler role is that a larger down payment can increase the loan you qualify for, not just the price. Putting down 20% eliminates private mortgage insurance, which frees up room in your monthly housing budget for principal and interest, effectively letting you borrow more for the same payment. It can also earn a slightly better rate, which further increases buying power.

The trade-off is liquidity: cash used for a down payment is no longer available for reserves, and lenders like to see savings left after closing. The sweet spot balances a down payment large enough to improve your terms against reserves large enough to reassure the lender and protect you. Test different down-payment amounts in the calculator to see how each moves both your loan and your price.

How interest rates affect how much you can borrow

Your interest rate has an outsized effect on pre-approval because it determines how much loan a given monthly payment supports. When rates rise, the same housing budget buys a smaller loan; when they fall, it buys a larger one. This is why buying power swings so much as rates move, even when incomes do not.

The effect is large. A one-percentage-point increase in the rate reduces the loan a fixed payment supports by roughly 10%. A buyer approved for a $400,000 loan at one rate might qualify for only about $360,000 after a one-point rise, on identical income and debts. That is an entire tier of homes lost to the rate alone.

Two implications follow. First, get pre-approved with a current, realistic rate rather than a hopeful low one, or your budget will be off. Second, if you buy at a high rate, remember that a future refinance can restore buying power if rates fall, so a high rate today is not permanent. Model different rates in the calculator to see how sensitive your maximum is, and check the payment itself with our mortgage calculator.

Pre-approval by loan type: conventional, FHA, VA, and USDA

The loan program you choose changes how much you can be pre-approved for, because each sets its own DTI limits and down-payment rules. Matching the program to your situation can meaningfully raise your budget.

• Conventional: the best pricing for strong borrowers, with DTI typically up to about 45% (sometimes 50% through automated underwriting). Requires as little as 3% down for some buyers, but 20% avoids mortgage insurance.
• FHA: the most flexible on DTI, often up to 50% with compensating factors, and just 3.5% down with a 580 score. This can pre-approve you for more, at the cost of mortgage insurance. See our FHA calculator.
• VA: for eligible veterans and service members, no down payment and no monthly mortgage insurance, with a focus on residual income that can allow high effective DTIs. Often the strongest buying power of all.
• USDA: for eligible rural and suburban buyers, no down payment but stricter DTI (around 41%) and income limits.

Because the programs differ so much, a buyer near the edge of qualifying for one may comfortably qualify under another. If your conventional pre-approval falls short of your target, an FHA or VA path may close the gap. Ask lenders to quote more than one program so you can compare both the amount and the total cost.

Pre-approval for self-employed borrowers

Self-employed buyers can absolutely get pre-approved, but the income side takes more documentation, and it is the most common source of pre-approval friction. Lenders cannot read your income off a pay stub; instead they average your net business income from the last two years of tax returns, after deductions.

This creates the classic self-employed trap: the write-offs that lower your tax bill also lower the income a lender credits you with, shrinking your pre-approval. A business owner who nets $150,000 but deducts down to $90,000 of taxable income is generally qualified on the smaller figure. Planning ahead, easing off aggressive deductions in the two years before you buy, can raise your qualifying income substantially.

To estimate your pre-approval honestly, enter the averaged, post-deduction income a lender would use, not your gross revenue. Lenders may add back certain non-cash deductions like depreciation, which helps, but be conservative. Strong reserves and a clean credit profile carry extra weight for self-employed files, because they offset the lender's uncertainty about variable income. Run your conservative income figure through the calculator to see a realistic maximum.

From pre-approval to clear-to-close: what happens next

Pre-approval is a milestone, not the finish line, and knowing the path ahead keeps your approval intact. After you receive a pre-approval letter and make an accepted offer, the loan moves through several stages before you get the keys.

First comes full underwriting, where the lender re-verifies your income, assets, and credit and reviews the property. Then the appraisal confirms the home is worth the price, protecting both you and the lender. The underwriter may issue conditions, requests for additional documents or explanations, which you clear one by one. Once all conditions are satisfied, the loan is clear to close, and you proceed to signing and funding.

The critical rule throughout is stability. Because the lender re-checks everything before closing, any change, a new loan, a job switch, a large unexplained deposit, can reopen your file or void the approval. Keep your finances exactly as they were at pre-approval, and the path from letter to keys is smooth. The estimate you build here helps you choose a target that will survive that scrutiny rather than one that stretches your file to its limit.

What Reddit and forums get right (and wrong) about pre-approval

Communities like r/FirstTimeHomeBuyer, r/personalfinance, and r/RealEstate are full of pre-approval discussion, and they are a useful reality check, with a few caveats. What the crowd usually gets right is the human advice: get pre-approved before you shop, do not borrow to your maximum, avoid new debt during the process, and compare multiple lenders. That collective wisdom mirrors what underwriters and advisors say.

What forums often get wrong, or at least muddle, is the specifics, because every borrower's numbers and every local market differ. A stranger's "you need $X income for a $Y home" reflects their rate, their down payment, their debts, and their state's taxes, none of which may match yours. Advice about exact amounts, timelines, and lender quirks can be outdated or regional.

The best way to use forums is for the qualitative lessons and emotional support, then to run your own numbers privately for the quantitative answer. That is exactly what this calculator is for: it gives you a figure grounded in your income, debts, and rate, so you can sanity-check the anecdotes you read against your real situation. Combine the crowd's hard-won behavioral advice with your own math, and you get the best of both.

Mortgage pre-approval glossary

A quick reference to the terms that come up during pre-approval.

• Pre-qualification: a quick, unverified estimate of what you might borrow.
• Pre-approval: a lender's conditional commitment after verifying income, assets, and credit.
• Debt-to-income (DTI) ratio: the share of gross income going to debt payments; the core limit on how much you can borrow.
• Front-end ratio: housing payment as a percentage of income; the 28% rule targets this.
• Gross income: pre-tax income, the figure lenders qualify you on.
• PITI: principal, interest, taxes, and insurance, the full housing payment.
• Hard inquiry: the credit pull for an official pre-approval; a small, temporary score effect.
• Reserves: savings left after closing, a compensating factor that can raise approval limits.
• Overlay: a lender's stricter rule added on top of a loan program's minimums.
• Pre-approval letter: the written document, valid 60 to 90 days, that you show to sellers.

Frequently Asked Questions

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