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Mortgage Pre-Approval

Get pre-approved in 15minutes.
Close your home in as few as 14 days
Start your pre-approval

Get pre-approved in 15 minutes.
Close your home in as few as 14 days.

Start your pre-approval

Pre-Approval Basics

A mortgage pre-approval is a letter that confirms your ability to qualify for the mortgage you need to buy a home. Written by your lender, the pre-approval verifies that your lender has conditionally approved you to borrow up to a certain amount, based on your income, assets, and other qualifying factors. The pre-approval letter signals to agents and sellers that you’re a serious buyer because you’ve already taken steps toward financing your home before putting in an offer. And because it means you can get your mortgage approved quickly, the pre-approval is one of the best tools for buyers in a competitive market.

With a pre-approval in hand, you’ll:

  • Understand what you can expect from the mortgage process
  • Gain peace of mind, knowing exactly what you can afford when buying a home
  • Stay competitive in a tight real estate market. 

While every lender’s pre-approval process is a bit different, getting pre-approved will give you a basic rundown of the loan products and interest rates that best suit your needs, along with how much you should plan to spend on your new home. When you’re ready to submit an offer, your agent will include your pre-approval letter with the offer, signaling to the seller that you’re prepared and qualified to secure financing, that you can close quickly, and that you’re serious about winning the deal.

In short, no. What matters at the pre-approval stage is that you build a responsive team of experts—an agent and a lender who will answer your questions and have your back when it’s time to put in an offer. 

Contrary to what you may think, the lender you use for pre-approval doesn’t have to be the lender you use to ultimately finance your home. Sometimes borrowers make the mistake of shopping for mortgage rates in the pre-approval stage and end up wasting precious time. No matter what lender you choose for your pre-approval, your lender can only lock in your rate once you’ve had an offer accepted on a property. Until then, you’ll only see estimates of the cost breakdown for your loan. That’s why it’s better to focus on your team in the pre-approval stage. Having experts at your back who will go the extra mile can be the difference between a rejected offer and an accepted offer.

Most banks and bigger lenders use automatic programs to pre-approve potential borrowers. More and more, sellers’ agents are turning away these canned pre-approvals because they don’t signal a true verification of what you can afford. At NewCastle, we take a more boutique approach, offering our borrowers both the convenience of online mortgaging and the confidence of an on-the-ground team. For every pre-approval, our in-office team of loan experts reviews the file, verifies your information, and an underwriter or other decision-maker on the loan authors the detailed pre-approval letter. This personalized process means that your pre-approval actually breaks down what you can afford, and helps ensure that your pre-approval serves as meaningful progress toward closing on your loan.

The sweet spot for your pre-approval is between 60 to 120 days before buying your home. As long as you close on your new place within those 120 days, your pre-approval will help you put in a strong offer. Giving yourself at least a 60-day window between your pre-approval and closing ensures that you have room to troubleshoot any unexpected issues that may arise. 

If, for example, your credit score is a few points lower than you expected, you’ll still have time to improve within your pre-approval window. By paying down a credit card, making payments, and lifting your score, you’ll improve your interest rate and lower your monthly payment before closing.

Our online mortgage pre-approval application takes about 15 minutes to complete, and most pre-approvals are fully processed within one business day. 

Once you’ve filled out the application, our team will get to work, checking your credit (always with your permission!), verifying your employment, income, and account balances. Then, a loan expert prepares a pre-approval letter based on your financial info. Because we’ve taken the time to verify your information, your pre-approval is more than just a pre-qualification. With a NewCastle pre-approval, you get a preliminary loan decision that you can rely on, with a clear list of the requirements for final approval.

Applying for a Pre-Approval

In order to pre-approve you for a mortgage, your lender will need:

  • Your name
  • Social Security Number
  • Current address
  • Date of Birth
  • Credit score
  • Employment information 
  • Income information
  • Account balances and savings information

This information will help your lender determine what you can afford to borrow, what your interest rate will be for the loan, and what loan products best fit your situation. 

First, your lender will compare the amount you want to borrow with the estimated value of the property you want to purchase. This ratio will determine some crucial numbers, like your total loan amount and down payment requirements.

Next, your lender will estimate the total monthly cost of your home, including your loan payments, property taxes, insurance costs, and any other applicable fees. Comparing this number to your monthly income and other debts, your lender will make sure you can afford the payments for your new home. 

With the relevant calculations completed, the lender prepares your mortgage pre-approval letter, specifying the loan type, maximum purchase price, down payment, and loan amount specific to your financial situation.

Yes. In order to give an accurate estimate of your loan costs, your lender will check your credit as part of the pre-approval process. Your credit score is the biggest factor in determining your loan’s interest rate, so it’s a crucial piece of your pre-approval info. By checking your credit, the lender can determine your best interest rate and accurately estimate your loan costs and monthly payment amount.

A NewCastle pre-approval is good for 60 days. If you haven’t found your next home in that time, no worries! We can update your pre-approval for another 60-day period without having you re-apply. 

The credit report we pull as part of your pre-approval is valid for 120 days. If you haven’t had any luck within 120 days, we’ll generate a new credit report and update your pre-approval based on this latest information. Because we take the extra time to re-verify your information, you can rest assured that your pre-approval is still a valuable step toward your homeownership—even if it takes a little longer to find the perfect place.

You’re Pre-Approved: What’s next?

Your pre-approval is beneficial in a number of ways, but its most immediate benefit comes when it’s time to submit an offer. A strong pre-approval signals to the seller that you’re able to secure financing for the home, that you’re ready to close quickly, and that you’re serious about purchasing a new property. Often, sellers will accept an offer with a strong pre-approval tacked on, as it signals a less risky deal and a more well-prepared buyer who’s motivated to close.

Your pre-approval letter is submitted to the seller as part of your formal offer on the home. If you’re working with an agent, provide your pre-approval letter to your agent as soon as you can. This way, your agent has the pre-approval on-hand and can submit it easily as part of your offer.

A mortgage pre-approval is not a guarantee that your offer will be accepted. If your pre-approval letter was a basic, template pre-approval from an automatic system, the seller may not feel confident in the pre-approval you submitted with your offer. Getting pre-approved with a lender who offers a more personalized, diligent pre-approval would strengthen your chances of an accepted offer. Buyers with cash in-hand, higher bids, or otherwise stronger offers might also mean that your pre-approval isn’t enough to win the deal. 

Yes—there’s always a chance that your lender may deny your loan after pre-approving you. But if you choose the right lender, this is much less likely to happen. You want your lender to do a careful review of your application at the pre-approval stage, eyeing your credit report and financial information up front. With this legwork in the early stages, your final approval should be a breeze. 

This is why NewCastle works so diligently on your file at the pre-approval stage—it can make a huge difference in your ability to find a home and close quickly. Our underwriters verify your information for pre-approval to ensure your pre-approval is accurate and reliable. With most mortgage companies, though, loan officers process pre-approvals. This might pose a problem, because a loan officer is more a salesman than a loan decision-maker. While a loan officer may want to secure the deal, they may not spot potential issues until you’re gearing up to close.

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