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Everything Required for a Mortgage Pre-Approval in Texas
Jennifer Hernandez • September 27, 2022
A mortgage loan is likely going to be the biggest loan that you take out in your lifetime. In the United States, the average mortgage loan in 2020 was $208,185.
Due to the significant amount of money at stake, lenders go through a much more thorough review process before simply signing off on a borrower's request. One way to expedite the home buying process is by having a valid pre-approval that has been obtained within 6 months. This will not only help you have a peace of mind, but will enhance your chances of having a successful home buying experience! One last important detail to note, is that a pre-qualification differs from an actual pre-approval. Here is a video where I have explained the two differences.
A pre-qualification is a review of credit only, while a pre-approval additionally reviews income, assets and special circumstances. Are you wondering what documents you will need to get pre-approved in Texas?
Get pre-approved for a mortgage in Texas with our guide!
Mortgage in Texas Guide!
1. Good Credit Can Help Pre-Approval
One of the first things that is crucial to pre-approval is to build up your credit score. The lender must verify if you meet the minimum standards for loan programs available to you. Credit score also greatly impacts the final interest rate.
A credit score measures how adept you are at paying your bills on time, while also avoiding excessive debt. There are many factors that are considered in the score, like percent utilization on credit cards, late payments or collections, number of open accounts, time since accounts opened, and inquiries into your credit.
Conventional loans require a minimum of a 620 credit score . The most ideal score, to obtain the most favorable interest rates, are scores 740-850. FHA loans have minimum credit scores of anywhere from 580 to 620, depending on the particular lender. Not all lenders are accepting lower scores, so be sure to check with your local lender(s).
If you suspect that your score is not meeting the standards listed above, you can take action now. Sign up for a credit reporting service. There are free ones, however the ones with a monthly fee generally are more robust and helpful. In my experience, www.myfico.com is the scoring system that most closely resembles credit scores that lenders obtain.
2. Your Income and Pre-Approval
The next thing that you will need to get pre-approval is to have proof of your monthly income. Income can be derived from many different sources, depending if you are employed, self employed, or retired. For employed borrowers, we will require at least 1 recent month of paystubs from your employer, showing year to date earnings as well.
For self employed borrowers, a 2 year history of both personal and business tax returns is generally required. If you receive other sources of income such as pensions, social security, disability, child support, alimony, or dividends and interest, we will request to show that it generally has been received for at least 2 years, and is likely to continue for 36 months.
There are exceptions to the 2 year history rule, and one of them is college education. Simply show your recent transcript or diploma, and the 2 years employment history should not be required. Reviewing income usually involves other questions such as gaps in employment, or a decline in income. If these circumstances apply to you, be prepared to explain and possibly document during the pre-approval process.
3. Why Your Assets and Reserves Matter in Pre-Approval
Assets are another crucial component of the pre-approval process. Verifying that you have funds for closing, and the source of those funds, will be required. A common question I get is if ALL the funds need to be in your possession prior to pre-approval. Not necessarily. Just let the lender know what future deposits might be, and they can consider the approval subject to the receipt of those monies. Bank statements for two months is required to show proof of funds. These can be checking accounts, savings, money market, retirement, stocks, etc. The lender will be reviewing for large deposits, and the source of those monies. If you have large amounts that were not from your paycheck, expect them to ask for proof of where the funds came from. Like the sale of something, or another account that transferred, a gift from a family member, are some of the most common.
Cash is not an acceptable source of deposit for lenders. What they are trying to prove, or disprove rather, is that you do not have any other debts or loans required to be repaid. Cash is not able to prove that. So beware! Also note, that any funds are considered seasoned after 60 days. Since lenders only ask for two months statements, they would not question not likely see a deposit from 90 days ago.
One last comment on assets. It's always a good idea to list as many accounts as you have available. You're pre-approval could be enhanced with what lenders refer to as RESERVES. These are monies remaining in your account after closing, that could be essentially used in case of a future job loss, in case you need to make your mortgage payment on time!
Download our free checklist on all documents required to get pre-approved here!
4. Tax Documents Needed for Pre-Approval
Two years history of employment is required for loan approval . For this reason, lenders ask for 2 years of W2 forms for employed borrowers, and if you are self employed , which means you own your own business, then 2 years tax returns for both personal and business will be required. There are exceptions. Conventional loan programs allow just 1 year, if the business is 5 or more years in existence. In addition of employed borrowers, recent college studies in most cases avoids the need for a 2 year history of employment.
5. Your Debt to Income Ratio
Depending on the program you are applying for, there are debt to income ratio requirements that lenders adhere to.
FHA loans, secured by the Federal Housing Administration, are the most lenient on debt ratios. The maximum allowable is generally 55% of your gross monthly income. However, this amount could be reduced, if there are other factors such as low credit score or low reserves as we mentioned in the previous section.
A Conventional loan has requirements that are more strict. The maximum debt to income ratio is 43-45percent for down payments less than 20 percent. If you put 20 percent down or more, you might get approval up to 50 percent of your gross monthly income. Loans with 20 percent down, if they are to be approved near the 50 percent debt to income range, should have other compensating factors such as a high credit score, or large number of reserves as mentioned above.
Get Pre Approval for Your Mortgage Loan
These are five of the most important factors when it comes to getting pre-approved for a mortgage loan in the great state of Texas. Make sure you have good credit, limited debt, good assets, and proper income documentation.
Do you want to be pre-approved to buy a home in Texas? Message us today at Loan With Jen to see how we can help you get started!
You've been looking at homes for months. Your sister offers to go in with you. Or your partner says let's do this together. Or a parent says, I'll help you qualify. Or a friend says we should buy a rental property. Suddenly that home you couldn't afford alone becomes possible. Co-owning property can absolutely be a smart move. It can get you into a home sooner, help you build equity faster, and turn a “ maybe someday ” into “ We're doing this! I've seen it work beautifully for hundreds of families over the years. But I've also seen it go sideways. Not because people had bad intentions, but because they skipped the hard conversations and left the details to chance. When co-ownership isn't structured right from the start, it doesn't just cause tension. It can turn into an expensive, exhausting legal mess that takes years to untangle. Here's what you need to know before you sign anything.
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Texas seniors can now exempt up to $200,000 from school taxes and transfer their tax freeze to a new home. Before buying a townhome or 55+ condo, ask these three HOA questions. Get smart downsizing tips from Houston loan officer Jen Hughes Hernandez.
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If you're a first-time homebuyer in Houston, you've probably felt that sinking feeling when you calculate how much cash you'll need upfront. Between the down payment, closing costs, and reserves, it can feel like you need tens of thousands of dollars just to get your foot in the door. But here's what many Houston homebuyers don't realize: there are numerous programs designed specifically to help with these upfront costs—and you might qualify for more help than you think. The problem isn't that assistance doesn't exist. The real issue is that most people simply don't know what's available or what questions to ask their lender. I've worked with countless Houston homebuyers who were genuinely surprised to discover they had options they never knew existed. That's exactly why it's so important to explore every possibility before you assume homeownership is out of reach. In this post, we'll walk through the types of assistance programs available to Houston first-time buyers, why so many people miss out on them, and how to make sure you're not leaving money on the table. Why Most Homebuyers Miss Out on Closing Cost Assistance Here's a scenario that plays out all too often: Someone decides they want to buy a home in Houston. They talk to a lender, get pre-approved, and then start house hunting. But when it comes time to discuss the actual costs to close, they're overwhelmed by the numbers and assume they just need to save more money. What they don't realize is that their lender might not have mentioned—or they might not have asked about—assistance programs that could cover thousands of dollars in upfront costs. The challenge isn't just a lack of programs. It's a lack of awareness. Many buyers simply don't know what questions to ask, and unfortunately, not every loan officer takes the time to explore every option with their clients. That's why working with a knowledgeable Houston mortgage professional who actively looks for ways to help you is so valuable. Types of Closing Cost Assistance Available in Houston Houston first-time homebuyers have access to several types of assistance programs, and the good news is that you might qualify for more than one. Here's what's out there: Down Payment Assistance Programs These programs can provide grants or low-interest loans to cover part or all of your down payment. Some are specific to Texas, while others are available through federal programs. The Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA) both offer programs that Houston buyers can access. Closing Cost Grants Beyond down payment help, many programs also assist with closing costs—the fees you pay to finalize your mortgage. These can include appraisal fees, title insurance, origination fees, and more. Grants don't need to be repaid, making them especially valuable. Seller Concessions In some market conditions, you can negotiate for the seller to cover a portion of your closing costs. This isn't a formal "program," but it's a strategy that can save you thousands when structured correctly. Employer Assistance Programs Some major Houston employers, including hospitals, universities, and corporations, offer homebuyer assistance as an employee benefit. It's worth checking with your HR department to see if this perk exists at your company. What You Should Ask Your Lender Don't wait for your lender to bring up assistance programs—take the initiative. Here are the key questions you should ask: "What down payment assistance programs am I eligible for based on my income and the home price I'm targeting?" "Are there any grants available that don't need to be repaid?" "Can I combine multiple assistance programs?" "What are the requirements or restrictions if I use these programs?" Remember, not all lenders are equally knowledgeable about every program available. If your lender seems unsure or dismissive, that might be a sign you need to work with someone who specializes in helping first-time buyers navigate these options. Don't Count Yourself Out Too Soon One of the biggest mistakes Houston homebuyers make is assuming they don't qualify for help before they even apply. Income limits for assistance programs are often higher than people expect, and there are programs designed for moderate-income buyers, not just those in financial hardship. The only way to know what you qualify for is to actually explore your options. That means having detailed conversations with your lender, doing your own research, and being willing to ask questions even if they feel basic. This is your financial future—there's no such thing as a dumb question
If you're a renter in Houston scrolling through Zillow on a Saturday morning, dreaming about having your own backyard or a place where you can finally paint the walls, you've probably caught yourself thinking: "I'm just not ready yet." Maybe you think you need a bigger down payment, a perfect credit score, or another year of savings. But here's what most first-time homebuyers don't realize—waiting for the "perfect" moment often means missing out on the right moment. The truth is, you might be closer to homeownership than you think. If you have steady income, you've started saving (even if it's not a huge amount), and you're seriously considering buying a home within the next year, you could already qualify. The biggest mistake isn't being unprepared—it's convincing yourself you're not ready when you actually are. In this post, we'll break down the real signs that you're ready to buy a home in Houston, why waiting can actually cost you more, and how to take the first step without second-guessing yourself Why First-Time Buyers in Houston Think They're Not Ready The "Someday" Trap Many renters in Houston fall into what I call the "someday" trap. Someday I'll have 20% down. Someday my credit will be perfect. Someday I'll feel completely confident. The problem? Someday keeps getting pushed further away while home prices and rent keep climbing. Houston's real estate market has shown consistent growth over the years, and waiting for the perfect conditions often means paying more later—both in home prices and in the rent you're spending while you wait. Myths That Keep You Waiting Let's clear up some common misconceptions. You don't need a 20% down payment (many first-time buyer programs require as little as 3-5%). You don't need perfect credit (though good credit certainly helps with interest rates). And you don't need to have everything figured out before you start the conversation with a mortgage professional. The Real Signs You're Ready to Buy a Home You Have Stable Income If you've been employed consistently and your income is reliable, you're checking one of the most important boxes. Lenders want to see that you can make your mortgage payments, and a steady job history shows exactly that. In Houston's diverse economy—from the Medical Center to the Energy Corridor—stable employment is often more achievable than first-time buyers realize. You've Started Saving Money Notice I didn't say "you've saved $50,000." If you've been consistently setting aside money, even if it's a few hundred dollars a month, you've developed the financial discipline that homeownership requires. Plus, there are down payment assistance programs available to Houston buyers that can help bridge the gap between what you've saved and what you need. You're Thinking Seriously About the Next Year Here's the key indicator: if buying a home has moved from a vague "someday" dream to something you're actively researching and thinking about for the next 6-12 months, that mindset shift matters. It means you're mentally and emotionally moving toward readiness, and that's often when it makes sense to have a real conversation about your options. Why Making a Plan Beats Waiting Knowledge Replaces Fear Most people wait because they don't know what they don't know. The home buying process feels mysterious and overwhelming. But once you sit down with a knowledgeable mortgage professional and create an actual plan, that fear transforms into clarity. You'll learn exactly what you qualify for, what you need to work on, and what timeline makes sense for your situation. Time Is Working Against You Every month you wait is a month you're paying someone else's mortgage through rent instead of building your own equity. In Houston neighborhoods from the Heights to Pearland, home values have historically appreciated over time, meaning earlier buyers have benefited from that growth. You Can Start Where You Are You don't have to be perfect to start the process. Maybe you'll learn you could buy now, or maybe you'll discover you need another six months to improve your credit score or save a bit more. Either way, you'll have a roadmap instead of just hoping you'll somehow feel "ready" eventually
If you bought your Houston home before 2022, you're likely sitting on a goldmine of equity—and you might be wondering how to tap into it without touching that beautiful 2%, 3%, or 4% mortgage rate you locked in. Maybe you're thinking about home improvements, consolidating high-interest debt, or building a financial cushion for your next move. Whatever your reason, you're not alone. More Houston homeowners than ever are exploring ways to access their home equity while keeping their low-rate first mortgage intact. The good news? You have options. The two most popular are HELOCs (Home Equity Lines of Credit) and home equity loans—and while they sound similar, they work very differently. In this post, I'll break down what each one is, how they work, and which might be the better fit for your financial goals. No jargon, no runaround—just the facts you need to make a smart decision.
Buying a house is a big process and if you don't use a Realtor, you are missing out on expertise that can save you thousands of dollars and hundreds of hours.