Key points
- A pre-approval is based on documents and a credit review; it supports an offer but is not a final loan commitment.
- Budget for cash beyond the down payment: closing costs, prepaid taxes and insurance, and reserves. Deposits are paid early but credited toward the price.
- Federal rules require the lender to deliver or mail a Loan Estimate within three business days of a loan application, and you must receive the Closing Disclosure at least three business days before consummation, usually the closing.
- Keep your financial picture stable until closing: no new credit, no unexplained large deposits, no job change without telling your lender.
Pre-qualification and pre-approval are different
A pre-qualification is usually an estimate based on what you tell a lender. A pre-approval follows a credit check and a review of income and asset documents, so it carries more weight with a seller. Lenders use these terms differently, so ask whether your credit, income and assets have actually been verified.
Even a pre-approval is conditional. The loan still depends on the property (appraisal, title, insurance) and on your circumstances staying the same. Ask the lender which conditions remain open and how long the underwriting usually takes for your loan type.
Cash a purchase actually requires
Most buyers focus on the down payment. A complete cash plan also includes the deposits paid when an offer is accepted and when the purchase and sale agreement is signed, the lender and title charges, attorney fees, prepaid property tax and insurance, and a reserve for the first months of ownership.
Ask your lender for an itemized estimate early, and confirm with your attorney how deposits are held and when each is due. The guide to closing costs walks through each line.
Two federal forms that keep the numbers honest
For most residential mortgages, the lender must deliver or mail a Loan Estimate within three business days after receiving your application, and you must receive the Closing Disclosure at least three business days before consummation, usually the closing. Compare the two line by line; questions are much easier to resolve before the closing date than at the table.
Documents a lender will usually request
Requirements vary by lender and loan program. Having these ready shortens the pre-approval and avoids delays after an offer is accepted.
- Recent pay stubs and W-2s, or tax returns if self-employed or paid by commission
- Two or more months of bank and investment statements, with an explanation for any large deposit
- A gift letter and the donor’s documentation if family funds are part of the down payment
- Government ID, and visa or residency documents where relevant
- Details of any other property you own, with mortgage, tax and insurance figures
Assemble the team before you need it
In Massachusetts a purchase typically involves a buyer’s agent, a lender, a real estate attorney, a home inspector and an insurance agent. Choosing them before the first serious offer means inspection appointments, contract review and the insurance binder can move inside the contract deadlines.
General information for Massachusetts buyers, current as of the date shown. It is not legal, tax or lending advice; confirm terms with your lender and attorney.