How To Protect Your Preapproval While House Shopping

Did you know that getting preapproved for a mortgage is a necessary step before you shop for a house? This step is important as it lets sellers know that you are able to get a loan to buy a house, and it helps you determine your budget when house shopping. What you might not realize, though, is that you can lose your preapproval from the time you get it until the time you buy a house. If you do not want this to happen, here are some ways you can protect your preapproval during this time.

Choose a house that you can afford and that appraises high enough

Your preapproval might not lead to qualifying for a loan if you choose a house that costs more than the amount you are preapproved for or if the house you choose appraises at an amount that is less than the price you are paying. The important thing to know with this is that the house you choose can affect your ability to get a loan, even after getting preapproved.

Avoid changing your debt-to-income ratio

Secondly, you could lose the ability to get a loan if you allow your debt-to-income (DTI) ratio to change for the worse. This is a vital ratio for lenders, as it tells them how much debt you have in comparison to the amount of income you earn. To get preapproved, your DTI probably was 36% or less, as this is a typical industry standard. If you incur more debt and your income stays the same, this ratio would increase, and this increase could disqualify you from getting a loan.

Do not switch jobs

If you decide to suddenly take a new job, it could also affect your ability to qualify for a loan. Your lender will look to make sure you have worked for the same company for at least two years, as this too is an industry standard that lenders factor into their decisions.

Avoid negative postings on your credit report

The other thing you need to worry about is negativity on your credit report. If anything negative is posted to your report during this time, it could cause you to lose your ability to get a mortgage.

These are the four main things you should keep in mind as you are shopping for a house after getting preapproved. If you have questions about getting a loan, you can learn more by talking to a home mortgage lender.


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