Mortgage Preapproval: How to Get Preapproved in Texas
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A mortgage preapproval is a lender’s written statement that it is willing to lend you up to a set amount, based on a credit check and on income, asset and debt information the lender has reviewed. In Texas it is the document sellers and listing agents expect to see with an offer. A preapproval is not a loan commitment. Final approval still depends on the home, the appraisal, title and any change in your finances before closing.
Herring Bank is a direct mortgage lender serving Texas, Oklahoma and Colorado, and we preapprove buyers for conventional, FHA, VA, USDA and jumbo purchase loans. This guide covers what a lender checks, the documents to gather, how long a letter lasts, what happens to your credit score and how to use a preapproval inside a Texas contract.
Key Takeaways
- Prequalification is usually based on numbers you report. A preapproval should be based on a credit report and documents the lender has actually reviewed.
- Lenders look at four things: credit score, debt-to-income ratio (DTI), stable income and cash for the down payment, closing costs and reserves.
- Fannie Mae's automated system allows a DTI up to 50%. FHA manual underwriting runs from 31/43 up to 40/50 with compensating factors. VA's benchmark is 41%.
- Fannie Mae requires credit, income and asset documents to be no more than four months old on the note date, so an older preapproval needs updated paperwork.
- Under the CFPB's guidance, multiple mortgage credit checks within 45 days count as a single inquiry, so you can compare lenders.
- In Texas, the TREC Third Party Financing Addendum gives you a set number of days to get “Buyer Approval.” A strong preapproval lets you keep that window short.
What is mortgage preapproval?
A preapproval answers two questions before you shop: how much a lender will let you borrow, and on which loan program. To issue one, the lender pulls your credit, calculates your debt-to-income ratio, verifies your income and checks that you have the cash to close. Most lenders also run the file through an automated underwriting system: Fannie Mae’s Desktop Underwriter (DU), Freddie Mac’s Loan Product Advisor (LPA) or FHA’s TOTAL Scorecard.
The result is a mortgage preapproval letter that names you, a maximum loan amount or purchase price, the loan type and usually an expiration date. Your agent attaches it to the offer. The CFPB notes that a preapproval letter “is not a guaranteed loan offer,” and that lenders use the words prequalification and preapproval differently. Ask any lender what it actually verified before it issued the letter.
Prequalification vs. preapproval vs. underwritten approval
The pre approval vs pre qualification question matters because sellers treat the letters differently. The table shows what each stage typically includes.
| Prequalification | Preapproval | Underwritten (conditional) approval | |
|---|---|---|---|
| Based on | Income, debts and assets you report | Credit report plus documents the lender reviews | Full file reviewed by an underwriter |
| Credit check | Sometimes a soft pull, sometimes none | Yes, usually a tri-merge report | Yes |
| Automated findings (DU, LPA, TOTAL) | Rarely | Usually | Yes |
| Property needed | No | No | Usually yes (appraisal and title follow) |
| Weight with a Texas seller | Low | Expected with most offers | Strongest; close to a cash offer on financing risk |
| Typical time | Minutes | Same day to a few business days | Several business days |
Some lenders, including some community banks, will send a file to an underwriter before you have a contract. If you are competing for a house in a multiple-offer situation, ask for that level of review.
What lenders check: credit, DTI, income and assets
Credit score
Lenders pull reports from Equifax, Experian and TransUnion and use the middle of your three scores. With two borrowers, the rules depend on the program. Program floors in 2026:
- Conventional: Fannie Mae requires 620 for manually underwritten fixed-rate loans. For loans run through DU, Fannie Mae’s Selling Guide (B3-5.1-01, updated April 2026) no longer sets a minimum score; DU weighs the whole file. Lenders can and often do set their own floor.
- FHA: a score of 580 or higher qualifies for maximum financing (3.5% down). Scores from 500 to 579 are limited to 90% loan-to-value, which means 10% down (HUD Handbook 4000.1).
- VA: VA does not publish a minimum score. Each lender sets its own.
Debt-to-income ratio
Your DTI is your total monthly debt payments, including the new house payment (principal, interest, taxes, insurance and HOA dues), divided by gross monthly income. The limits that matter at preapproval:
- Fannie Mae: 36% for manual underwriting, up to 45% with credit score and reserve requirements, and up to 50% through DU (Fannie Mae Selling Guide B3-6-02).
- FHA manual underwriting: 31/43 with no compensating factors, up to 37/47 with one and 40/50 with two (HUD 4000.1). Automated approvals can go higher.
- VA: 41% is the benchmark, and residual income carries equal weight (38 CFR 36.4340).
Our guide to what a good debt-to-income ratio for a mortgage looks like walks through the math in detail.
Income and employment
Lenders want stable, likely-to-continue income, usually backed by a two-year history. Salaried borrowers show pay stubs and W-2s. Commission, bonus and overtime income generally needs a history before it counts. If you own 25% or more of a business, you are treated as self-employed and qualify on tax returns. Our self-employed mortgage guide explains how that income is calculated.
Assets and reserves
Expect to document the down payment, closing costs and any reserves the program requires, usually with two months of bank statements. Large deposits that aren’t payroll need a paper trail. Gift funds need a signed gift letter.
Document checklist for a preapproval
These are the documents needed for a mortgage preapproval at most lenders. Gathering them before you apply is the single biggest way to speed things up.
- Identity: driver’s license or passport, and your Social Security number.
- Income (W-2 employees): pay stubs covering the most recent 30 days and W-2s for the past two years.
- Income (self-employed, 1099, or 25%+ owners): two years of signed personal federal returns with all schedules, business returns (1120-S, 1065 or 1120) where applicable, K-1s and a year-to-date profit and loss statement if the lender asks for one.
- Other income: award letters for Social Security, pension, VA disability or retirement income; divorce decree for alimony or child support you receive.
- Assets: two most recent monthly statements for every checking, savings and investment account you plan to use, with all pages.
- Debts and obligations: statements for any debt not on your credit report, plus divorce decree or court order for support you pay.
- Housing history: landlord contact information or 12 months of rent payments if the lender asks.
- VA buyers: DD-214 or a statement of service, or your Certificate of Eligibility.
- Gifts: a signed gift letter stating the amount, the donor’s relationship and that no repayment is expected.
- Credit explanations: a short letter of explanation for recent inquiries, late payments or gaps in employment. See what a letter of explanation is and how to write one.
How to get preapproved for a mortgage, step by step
- Check your own credit first. Pull your reports free at annualcreditreport.com and dispute errors. Checking your own credit does not affect your scores.
- Set a payment you are comfortable with. Use Herring’s mortgage affordability calculator, then add Texas property taxes and insurance, which the calculator does not include.
- Gather the documents above as PDFs so you can upload them in one sitting.
- Apply with two or three lenders inside 45 days. Compare the preapproval amount, the loan program and the Loan Estimate, which a lender must give you within three business days of receiving your application.
- Answer conditions quickly. Most delays come from a missing page of a bank statement or an unexplained deposit.
- Get the letter and review it. Check the name, the loan type, the purchase price and the expiration date. Ask the loan officer to issue a letter for the exact offer price when you write a contract, so you don’t show the seller your maximum.
- Don’t change anything. No new credit cards, car loans, job changes or large cash moves until after closing.
Worked example: preapproval math on a $350,000 Fort Worth home
Here is how a lender gets from your paycheck to a preapproval amount. The rate, tax and insurance figures are illustrative assumptions, not a quote.
| Item | Monthly amount |
|---|---|
| Purchase price $350,000, 5% down, conventional loan of $332,500 at an example rate of 6.5% (30-year fixed): principal and interest | $2,102 |
| Property taxes at an assumed 2.0% combined Texas rate | $583 |
| Homeowners insurance (assumed) | $250 |
| Private mortgage insurance (estimate; varies by credit score) | $110 |
| Total housing payment | $3,045 |
| Other monthly debts (car and credit card minimums) | $500 |
| Total monthly obligations | $3,545 |
At a 45% back-end DTI, this buyer needs about $7,880 a month in gross income, or about $94,500 a year. At 50% (the DU maximum), the income needed falls to about $85,100. At 43%, it rises to about $98,900. Texas property taxes are a large part of the payment, which is why the same income buys less house here than in a low-tax state. Our page on the income you need to afford a $300K house in Texas runs the same math at a lower price.
How long a preapproval letter lasts
Most preapproval letters carry an expiration date. Fannie Mae requires credit, employment, income and asset documents to be no more than four months old on the day the loan closes. Lenders usually set letter expirations shorter than that so the file still meets the four-month rule at closing.
When a letter expires, you rarely start over. The lender asks for new pay stubs and bank statements, may re-pull credit if the report has aged out, and reissues the letter. If rates have moved, the maximum amount may change too.
Does getting preapproved hurt your credit?
A preapproval usually involves a hard inquiry, which the CFPB says “typically has a small negative effect” on your scores. The bigger point is in the same CFPB guidance: within a 45-day window, multiple credit checks from mortgage lenders are recorded as a single inquiry, because you are only buying one home. You can collect several preapprovals and Loan Estimates without additional damage as long as the last check falls within 45 days of the first.
What does hurt is other new credit. A car loan or new credit card between preapproval and closing adds an inquiry, may add a payment that pushes your DTI over the limit, and can force the lender to re-underwrite your file. Fannie Mae requires re-underwriting when new debt pushes DTI past its tolerances.
Using a preapproval in a competitive Texas market
Texas contracts give buyers two tools that work alongside a preapproval. Knowing how they fit together helps you write a stronger offer without taking on more risk than you mean to.
The option period
Under Paragraph 5 of the TREC One to Four Family Residential Contract (Resale), Form 20-19, the buyer pays an option fee to the escrow agent within three days of the effective date. In exchange, the buyer gets an unrestricted right to terminate during a negotiated number of days, the option period. If you terminate in time, you lose the option fee but get your earnest money back. The option fee is credited to the price if you close. The option period is mainly for inspections. It is not a financing contingency.
The Third Party Financing Addendum (TREC Form 40-11)
When a buyer uses a mortgage, the contract usually includes the Third Party Financing Addendum. Paragraph 2A lets you make the contract subject to “Buyer Approval” for a number of days you fill in. If the lender can’t approve you on your assets, income and credit within that window, you can terminate with a written statement from the lender and get your earnest money back. After the window closes, the contract is no longer subject to Buyer Approval. Paragraph 2B separately covers “Property Approval,” such as an appraisal or lender-required repairs.
A preapproval that has already been through underwriting lets you offer a short Buyer Approval period, or check the box saying the contract is not subject to Buyer Approval, without gambling your earnest money. Ask your loan officer how far your file has been reviewed before you choose the number of days.
Other ways a preapproval strengthens a Texas offer
- Have the letter match the offer price, not your maximum.
- Have your loan officer available to take a call from the listing agent.
- Know your cash to close, including earnest money, the option fee and survey costs. Our breakdown of typical closing costs in Texas helps you budget.
- Track today’s mortgage rates so a rate move doesn’t shrink your budget after you’re under contract.
For the full Texas buying sequence after preapproval, see how to get a mortgage in Texas, step by step or start on our Texas mortgage page.
Herring Bank NMLS #415783 | Member FDIC | Equal Housing Lender. This article is for educational purposes only and does not constitute financial, legal or tax advice. It is not a commitment to lend. Loan programs, rates and eligibility requirements are subject to change without notice. Payment examples use assumed rates, taxes and insurance and are not a quote.
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This article is for educational purposes only and does not constitute financial, legal, or tax advice. It is not a commitment to lend. Loan programs, rates, and eligibility requirements are subject to change without notice. Consult a qualified professional before making financial decisions.
