Lenders look at how much of your monthly income goes toward debt (car loans, student loans, credit cards).

Getting approved for a mortgage is often more about your "financial paperwork" than your actual bank balance. Lenders want to see that you are a reliable bet before they hand over hundreds of thousands of dollars.

Once you apply for a mortgage, do not make any sudden moves. Don't quit your job, don't change industries, and don't close old credit accounts. Even a small change in your financial profile can cause a lender to revoke an approval at the last minute.

A "pre-qualification" is a quick estimate, but a is a conditional commitment from a lender.

In a competitive market, most sellers won't even look at your offer unless it's accompanied by a pre-approval letter. It proves you have the financial backing to close the deal. 6. Keep Your Finances "Frozen"

Most lenders want your total debt—including your future mortgage—to be 43% or less of your gross monthly income.

Avoid taking out new loans (like a new car) or making large purchases on credit cards in the six months leading up to your home search. 3. Organize Your Paperwork

Here is a step-by-step guide to getting that "Approved" stamp. 1. Check Your Credit Score