8 Tips to Ace Your Mortgage Pre-Approval

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Getting approved for a mortgage feels impossible for some, but for many, it’s within reach.

You might just need a little help getting prepared.

Luckily, there are more ways to prepare than ever. Here are services and tools to help you ace your mortgage pre-approval.

Connect with a lender to see if you can be pre-approved now.

1. Redirect unnecessary spending to a homebuying fund

For some of us, subscriptions are getting out of hand.

What if you could cut subscriptions and other spending by $50 to $100 per month and put it in a high-yield savings account, such as with Axos Bank? That’s up to $1,200 saved toward a down payment per year.

New personal finance apps like Rocket Money can help you cancel subscriptions, lower bills, and manage your money better. The app is free to download and basic features are free. Rocket Money offers premium features with a “pay what you think is fair” approach: $4 to $5 per month annually or $6 to $12 for monthly billing.

Try Rocket Money now.

2. Build your credit while paying everyday bills

It’s one thing to have bad credit, but many people have a separate problem: no credit at all.

That makes mortgage approval much harder.

Instead, open a few credit cards. Charge a few dollars and pay them off in full each month.

Better yet, build credit while paying everyday bills with services like StellarFi. This service pay your bills for you, then you automatically pay them back. SellarFi then reports your on-time payments to Experian® and Equifax®.

Your bills are typically not reported to credit bureaus. But with StellarFi, they are. 

You end up with a stronger, longer credit history, potentially helping you ace that pre-approval meeting with your loan officer.

Sign up for StellarFi.

3. Check your credit for free (really)

Speaking of credit, most people don’t look at their credit report regularly.

It’s a treasure trove of information: account balances, payment histories, last known address, and more.

But credit reports aren’t always accurate.

That’s why the government mandated the site AnnualCreditReport.com for consumers to check their credit up to once per week, free with no strings attached.

Pinpoint problem areas and correct errors before requesting your mortgage pre-approval.

4. Earn credit card points toward closing costs

You’ve heard of airline miles and cash back, but how about points toward closing costs and a down payment when you use Rocket Mortgage®?

That’s exactly what one credit card could do for you. You could earn up to 5% back toward closing costs and down payment when you use Rocket Mortgage – every time you spend with the Rocket Visa Signature® Card.

For example, say you have $1,000 in monthly expenses — $12,000 annually. Each year, you would earn $600 toward closing costs if you use Rocket Mortgage as your lender when you buy a home.

But this is a credit card, so you’ll spend more on interest if you don’t pay it off each month. There’s no annual fee if you have a mortgage with Rocket; $95 annual fee otherwise.

Apply now for the Rocket Card.  (Terms and conditions apply.)

5. Consolidate and refinance debt

According to mortgage data firm CoreLogic, 37% of mortgage denials are due to high debt-to-income ratios.

But it’s not the amount of your debt, but the payment that affects “DTI”. 

One little-known way to reduce DTI is to consolidate or refinance debt into lower monthly payments.

For example, you have a 5-year car loan of $750 per month. You could refinance it into a 7-year loan with a lower payment. Or consolidate two $10,000 personal loans with $400 payments into one $20,000 loan with a payment of $600.

Look into student loan consolidation and reducing payments with an income-based repayment (IBR) plan. Lenders now use lower IBR payments in DTI calculations instead of the full scheduled payment.

Find a lender to see if you can be pre-approved.

6. Open a high-yield savings account

With inflation at 3-4% per year, you need to be making at least that much in interest on your savings not to lose money.

A high-yield savings account, like one from Axos Bank, helps your money work harder 24 hours a day with nearly zero effort from you.

Throw 10% of your income into a high-earning account. You’ll be shocked at how much you’ll have in six months.

Explore Axos Bank account options.

7. Pick up side gigs

The bad news: side gigs don’t typically count toward mortgage qualifying income.

The good news: side gig earnings are a legitimate source of down payment, closing costs, and financial reserves, all of which help you get approved for a home loan.

Picking up a side gig is easier than ever with services like Kash Kick. Earn money while you’re in line at the store or otherwise wasting time. Take surveys, test apps, and get paid.

Then there’s Scrambly.io. Test games, sign up for free products, and get paid for it. What’s better, invite friends and get a cut of everything they earn.

Open a high-yield savings account, like with Axos Bank, to keep your earnings. It will be nice chunk of money ready to help you qualify for a mortgage.

8. Ask around for a down payment gift

While lenders accept financial gifts from family, most first-time buyers don’t have a rich relative who can drop 5 figures on a down payment for them.

But does anyone in your family have $500 to give? Micro-gifts are acceptable to lenders. Even $100 could help your down payment fund and assist with your home loan approval. 

Instead of a birthday gift, graduation present, or wedding gift, ask for funds to buy a home.

Getting pre-approved may not be as hard as you think

Many people who are considering buying a home could be pre-approved today – they just haven’t applied yet.

Get started by connecting with a lender. You could become a homeowner sooner than you think.

Check your pre-approval eligibility with a lender.


  • Tim Lucas

    Tim Lucas (NMLS 118763) has 20 years of hands-on mortgage industry experience helping everyone from first-time buyers to experienced investors. He purchased his first home at 26 with just $1,100 out-of-pocket and now owns real estate worth $2.4 million. Tim was the managing editor at national websites TheMortgageReports.com and MyMortgageInsider.com and has been featured in publications such as Time, U.S. News, MSN, and more. He is a licensed loan originator (NMLS 118763). Connect with Tim on LinkedIn, Twitter, and TikTok.