Mortgage Pre-Approval & Proof of Funds
by stazhkova on 01.09.2025
Hello. Today we will go over the first and most important step when purchasing real estate—confirming your financial readiness. Without this, you will not be able to make a competitive offer and quickly secure a property you like. I will explain which documents you need to prepare, how to obtain loan approval, and which types of lenders to consider.
Determining the budget and confirming funds
Start with a clear understanding of your budget. If you plan to buy with your own funds, prepare proof of their availability. This may be a bank statement, a tax return, or another official document that confirms the lawful origin of the funds. Such documents will be needed both by the seller and your realtor.
If you need a loan
Most buyers take out a mortgage. To do this, first contact a loan specialist. They will check your credit history, verify your income, and calculate the amount the bank is willing to lend you. The result will be a pre-approval—a document showing that you can qualify for a loan up to a certain amount. I recommend not limiting yourself to one bank, but requesting terms from several lenders to choose the most favorable option.
Types of lenders
You have three main options:
- Traditional banks — suitable for those with stable income and good credit history. They often offer the best terms but have strict requirements.
- Mortgage brokers — help select an optimal program from different banks and lending institutions. Especially useful if you have a nonstandard situation or an average credit score.
- Online lenders — allow you to submit an application quickly and get a response. However, their rates may be higher than those of banks, so consider them an additional option.
Obtaining multiple approvals
I advise getting pre-approval from at least three lenders—this may be a bank, a broker, and an online company. This way you will keep flexibility in negotiations and be able to act quickly if one lender changes its terms. Do not worry about your credit history: all inquiries made within roughly two weeks are counted as one.
Financial discipline before purchase
After you begin searching for a home, avoid new credit obligations and large purchases. Do not take out installment plans, do not increase your credit card balances, and do not make abrupt changes to your financial documents. Also, set aside the down payment amount in a separate account in advance so that the funds are ready at the time of the transaction.
Conclusion
Confirming financial readiness is the key to a successful purchase. When you know your budget and have pre-approval in hand, you can act confidently and quickly secure the property you like. In the next video, we will look at how to choose a realtor who will guide you effectively through the entire purchase process.
