Orlando Mortgage Pre-Approval Guide

The very first thing I tell every buyer is this: get pre-approved before you start looking at homes. Not pre-qualified — pre-approved. As a local Orlando realtor, I have seen too many buyers fall in love with a house only to find out they cannot get the financing. Let me walk you through the process so you are ready.

Pre-Qualification vs. Pre-Approval

These are not the same thing, and the difference matters in Orlando's market. Pre-qualification is an informal estimate based on information you tell the lender — they do not verify anything. It is essentially a ballpark number. Pre-approval is a formal process where the lender pulls your credit, verifies your income and assets, and issues a conditional commitment to lend you a specific amount.

In a competitive market, sellers want to see a pre-approval letter with your offer. Many will not even consider an offer without one. It tells the seller you are serious, your finances have been reviewed, and you are capable of closing.

What Lenders Look At

Every lender evaluates the same core factors, regardless of loan type:

• Credit score — This is the biggest factor in determining your interest rate. Higher scores get better rates, which directly affects your monthly payment and how much home you can afford.
• Debt-to-income ratio (DTI) — Lenders compare your monthly debt payments to your gross monthly income. Most lenders want your total DTI (including the new mortgage payment) to be under 43 percent, though some loan programs allow higher.
• Income and employment stability — Lenders want to see steady income, ideally at least two years with the same employer or in the same field. Self-employed borrowers need additional documentation.
• Down payment and savings — The amount you can put down affects your loan type options, interest rate, and whether you need private mortgage insurance (PMI).
• Credit history — Beyond the score, lenders look at late payments, collections, bankruptcies, and overall credit behavior.

Loan Types Compared

Conventional loans are the most common. They typically require a minimum credit score of 620, a down payment of 3 to 20 percent, and a DTI under 43 percent. If you put less than 20 percent down, you will pay private mortgage insurance (PMI) until you reach 20 percent equity. The 2026 conforming loan limit is $832,750.

FHA loans are popular with first-time buyers because they have more flexible credit requirements — a minimum score of 580 with 3.5 percent down, or as low as 500 with 10 percent down. FHA loans require mortgage insurance for the life of the loan if you put less than 10 percent down. The 2026 FHA loan limit for Orange County is $757,850.

VA loans are available to eligible veterans, active-duty military, and some surviving spouses. They offer zero down payment, no PMI, and competitive interest rates. There is no federal minimum credit score, but most lenders want at least 620. VA loans require a Certificate of Eligibility (COE) and a one-time funding fee that can be rolled into the loan.

USDA loans offer zero down payment for homes in eligible rural areas. Some areas on the outskirts of Orlando may qualify. Income limits apply.

Documents You Need for Pre-Approval

Have these ready before you contact a lender — it will speed up the process significantly:

• Two recent pay stubs — Your most recent 30 days of pay documentation
• W-2 forms — From the last two years
• Federal tax returns — Last two years, especially if self-employed or with variable income
• Bank statements — Two months of complete statements for every account
• Photo ID — Driver's license or passport
• Social Security number — For the credit check
• Self-employed? — You will also need profit and loss statements and possibly a CPA letter

Tips to Strengthen Your Application

• Pay down existing debt — Lowering your DTI ratio improves your approval odds and may qualify you for a larger loan.
• Do not open new credit accounts — Avoid applying for new credit cards, car loans, or other debt during the pre-approval and home buying process.
• Save for closing costs too — Your down payment is not your only upfront expense. Budget 2 to 4 percent of the purchase price for closing costs.
• Shop multiple lenders — Get quotes from at least three lenders. Even a small difference in interest rate can save you tens of thousands over the life of the loan.
• Keep your job stable — Changing jobs during the buying process can complicate your approval. If possible, wait until after closing.

Work With Micaela Navarra

Getting pre-approved is the first step I recommend for every buyer. I work with local lenders who treat my clients like family — because that is how I treat you. Let me help you find the right loan for your situation.

Languages: English, Italian, Spanish, and Portuguese

Call or text: 407.761.5501  |  Email: Mnavarrarealty@gmail.com