How To Increase Your Mortgage Prequalification or Preapproval Amount

5. Consider a Co-Signer

Adding a co-signer or co-borrower to your mortgage application may help increase your prequalification or preapproval amount, especially if the additional borrower has excellent credit and a high income.

However, co-signers share legal responsibility for the mortgage loan, so any missed payments will affect both borrowers' credit scores. So you should be comfortably able to afford your monthly payment before asking someone to co-sign for you on a mortgage loan.

6. Make a Larger Down Payment

A larger down payment may help you qualify for a larger mortgage loan since it reduces the amount you need to borrow. It may also lower your monthly mortgage payment and improve your loan-to-value ratio. And making a down payment of at least 20% will help you avoid private mortgage insurance (PMI) on conventional loans and possibly help you qualify for lower rates on other loan options.

7. Consider Other Types of Loans

Different loan programs have different qualification requirements, so exploring other types of mortgages can help you find the loan that best fits your financial situation. For example, government-backed loans like FHA, VA, or USDA loans come with flexible credit and down payment requirements for eligible borrowers. A lender can help you compare options and determine which loan program is the best fit.

8. Adjust Your Home Budget

In some situations, the best option may be to adjust your expectations instead of trying to increase your loan amount. Shopping for homes at a lower price point can improve your affordability and lead to less financial stress. You can use a home affordability calculator to estimate the right price range based on your income, debt, and down payment.

9. Talk to Your Lender

If your financial situation has improved since you initially applied, it may be a good idea to talk to your mortgage lender about updating your application. For example, you may have recently received a raise or paid off debt. In that case, your lender may be willing to reevaluate your financial information and determine whether you qualify for a higher loan amount based on the new information.

Want to explore your mortgage options? Connect with us to learn what loans best fit your goals and lifestyle.

What Not to Do After Getting Preapproved or Prequalified

Once you've preapproved or prequalified for a mortgage, it's important not to make any big changes until your mortgage closes, because this could affect your final approval. Here are some actions to avoid once you're preapproved or prequalified:

• Don't change jobs: Changing employers during the mortgage process may lead to delays or require additional underwriting to allow lenders to meet mortgage guidelines requiring a stable income.
• Don't make big purchases: Large purchases like cars, furniture, or expensive vacations can increase your debt load or reduce your savings. This could negatively affect your DTI ratio or cash reserves.
• Don't co-sign loans for others: Co-signing a loan adds a new financial obligation to your credit profile, even if someone else is making the payments. This may reduce the amount you qualify to borrow.

Increasing Mortgage Prequalification or Preapproval Amount FAQs

Mortgage prequalification and preapproval can be confusing, especially for first-time homebuyers. If you have additional questions, the following information may help.

Can You Increase Loan Amount After Prequalification or Preapproval?

Yes, it may be possible to increase your qualifying loan amount after getting prequalified or preapproved if your financial situation improves. Your lender may be willing to review changes like a higher income or improved credit score.

Can You Go Higher Than Your Prequalification or Preapproval Amount When Buying a Home?

You can always shop for homes above your preapproval amount, but you'll need to either to have your prequalification updated, make a larger down payment, or find another financing option to finance the home.

How Long Do Mortgage Prequalifications or Preapprovals Last?

Mortgage preapprovals and prequalifications often remain valid for about 60 to 90 days, though the exact timeline varies on your lender. If your approval expires, you may need to reapply, which could be a good opportunity to update you financial information and possibly qualify for a higher amount.

Final Thoughts: You Can Take Steps to Increase Your Mortgage Prequalification or Preapproval Amount

If your initial mortgage prequalification or preapproval amount feels too low, there may be ways to improve it. Increasing your income, paying down debt, or improving your credit can strengthen your application and improve your purchasing power. To learn more about your mortgage options or start the application process, explore the available loan programs and get prequalified today.