This tool could be the difference between buying or losing your dream home

Imagine yourself shopping for a new home. After a few weeks paging through ads and touring a few options, you finally find the one. It’s spacious, has an attached garage, sits in a quiet suburb, and its fenced yard and a patio are practically built for neighborhood cookouts.

You know the housing market is hot, so you need to make an offer before anyone else tries to steal it from you. But the seller isn’t taking your offer seriously.

While you try to negotiate and hang onto a thread of hope, someone else swoops in with a stack of papers and closes the sale. Your dream home is gone. You’re left crushed and starting the search all over again.

How could this happen?

It’s an honest mistake, and more common than you know. For a seller to sincerely consider your offer, it helps if you can show that you are a financially stable, low-risk buyer. A job, income and assets don’t mean anything unless they’re backed up by your bank with one critical document: A letter of preapproval.

What is preapproval?

Preapproval means that your lender has looked over your finances to get an overall picture of how much home you can afford, and your ability to pay it back over the length of the mortgage. The lender offers to loan you up to a certain amount towards the purchase of a home, assuming you qualify and all terms and conditions for the purchase are met.

Why is it so important?

Simply put, it could be the difference between landing and losing a home.

Shopping for a house is fun, but also stressful. You're analyzing the house you want to buy, as well as the neighborhood, commuting routes, as well as proximity to schools, groceries, and other things you find important. You are also thinking ahead to the paperwork and financial responsibility.

Getting preapproved will answer a lot of your initial finance questions. It also frees your mind to concentrate on the other aspects of home buying.

Know your Buying Power

Knowing what you can afford helps you shop because you can more easily narrow down the selection to houses within your price range. Besides, putting down an offer only to find out you don’t qualify for the loan is a heartache we’d all like to avoid. If you have preapproval, you are seen as a lower-risk buyer.


If you were selling a house and someone made an offer and said they could afford it, would you take their word for it or demand some proof? A letter of preapproval makes your offer more credible because it shows that your credit has been analyzed and approved by a lending institution.

Having this important first step already made is also easier on your realtor. It’s worth their time to look for houses that may be a good fit, and to advocate for you as a buyer. In fact, some realtors won’t work with you at all until to have the preapproval letter in your hands.

The Negotiating Advantage

Let’s be honest, if you already know what you qualify for and what you can afford, you’re in a better negotiating position. That can be a confidence booster and help you negotiate a better deal or win the bid for the house over other people who do not have that ammunition at their side.

These days, houses will appear on the market and then disappear just as quickly. Preapproval keeps you in a nimbler position to make a move on that home you want.

In a competitive housing market, it’s important to stand out from the other buyers who may not yet have their paperwork and preapprovals in order. If you are able to put in a confident offer, knowing that you have the backing of your bank, then you are in a much better position to land that new home.

Want to apply? Do this first.

To help speed up the process, or identify potential problems beforehand, there is some homework you can do before speaking to a lender.
  • Gather your paperwork. Get the last couple years of W2s and/or 1099 forms, recent pay stubs, tax returns, and your driver’s license.
    • Note: If you are self-employed, you may need to supply full tax returns instead of a simple W2. The paperwork requirements can be stricter for self-employed workers.
  • Head over to the Starion Bank mortgage resources page and download the Checklist. This will give you a rundown of all the materials you need to collect before visiting with a Starion mortgage officer, as well as the forms you’ll fill out and sign during preapproval and loan application processes.
  • Starion has a mortgage calculator you can use to plug in some rough numbers. Keep in mind that multiple home buying programs exist, and unless you’re well versed in them, the calculator may not be indicative of what you qualify for, or what your monthly payments would be.

Start the Process Today

Yes, you can do a pre-approval with Starion!
  • When you’re ready to begin the process, choose a Starion mortgage banker from your area, to go their profile page, and then click on the “Apply for a Home Loan” button.
  • That will launch you into the online application process. Don’t worry, it only takes a few minutes to fill in the information, and if there is a piece of information you don’t have, you can leave it blank and finish it later.
    • Note: You do have to leave out the subject/property address and then put TBD on it if you’re applying for preapproval.
  • Once you fill out the form to the best of your knowledge, the mortgage banker will set up a time to meet with you. Together, you’ll go over the application, and verify the information such as assets and liabilities (that comes up from the credit report), and then determine what you qualify for.
If everything checks out, you’ll get a preapproval letter so you can start shopping for a new home.  Sometimes that can happen in as little as a few hours, or it may take a couple days. It all depends on your credit report and the complexity of your financials.

And that's it! With the letter in hand, you’re all set to take advantage of your new status and find that dream house. Happy house hunting!