By: Joe Delmore
Loan Officer
HomeStar Bank & Financial Services

NMLS: #767638
Phone: (815) 935-6625


You’ve been searching online for just the right home, cruising neighborhoods looking for the “that’s it!” house and picturing yourself on your shady new porch. You know there’s plenty to do before you get to the really serious house hunting, but it’s hard to resist.

Hang on, you’re almost there. You should have one thing in hand before the fun begins: your preapproval letter.


Mortgage terminology can be confusing. One important milestone to becoming a serious buyer is understanding the difference between being prequalified and preapproved.

Prequalifying means you’ve been initially screened by a lender. It is only getting your foot in the door. Usually, you will submit some basic information, and the lender will approve a rough estimate of what you might be able to afford.

On the other hand, preapproval takes the preliminary loan process a step further. Additional financial information is gathered, likely including a credit report. In some instances, you might be asked to provide many of the same documents that will be required to complete the actual loan process, including tax returns, bank statements and employment verification. With a preapproval letter from your lender, real estate agents and sellers know you are a serious buyer. 

The preapproval letter can be shown to a prospective seller. It proves that you are a serious buyer and have
the ability to go through with the sale, which makes you a much more attractive buyer to sellers.


We mentioned you’ll need to provide some information when applying for preapproval, to demonstrate your financial history and reliability. This may include:

  • 2 Years Of W-2’s & 1 Month Current Pay Stubs
  • 2 Years Landlord / Mortgage Company Payments
  • 2 Year History Of Employment (Employer Name, Address)
  • Bank’s Name, Address, Account Numbers, Balances
  • 3 Most Recent Bank Statements (All Accounts)
  • 401(k) / IRA Statements
  • Open Loans / Credit Accts (Lender Name, Address, Account Number, Monthly Payment, Balance)
  • Loan Information On Other Real Estate Owned
  • Self-Employed: Last 2 Years Tax Returns (All Attachments), YTD, P&L, Balance Sheet


While a preapproval is proof that a lender is willing to make you a loan, it is not an official commitment until you complete the full application process. Other matters during the closing process can change things, including an appraisal of the home’s value, your ability to make a sufficient down payment, and changes to your credit.

That means it’s important to:

  • Keep your finances operating smoothly in the meantime
  • Avoid opening any new credit accounts — for furniture or anything else you’ll be planning for your new
  • address
  • Keep credit cards paid up and without substantial balance increases.


Having a preapproval letter in hand is often required in order to place a bid. A loan preapproval might not be a home run, but it will get you on base.

Interested in obtaining a preapproval? Work with Kankakee County’s #1 Home Loan Lender. Call (815) 468- BANK (2265) or stop by one of our five branches and a Loan Officer will help you.


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