Getting preapproved for a mortgage is one of the most important early steps in buying a home. It shows sellers that you’re a serious buyer and gives you a clear idea of how much financing you might qualify for. But what happens if the number you’re given isn’t enough for the type of property you want? Fortunately, there are ways to strengthen your application and potentially secure a higher preapproval amount.
What Exactly Is a Mortgage Preapproval?
A mortgage preapproval is essentially a conditional green light from a lender. It’s a written statement that, based on your credit, income, and debts, the lender is prepared to finance up to a certain amount at a specific interest rate. While not an absolute guarantee, it carries a lot of weight when you’re making offers. Sellers are more likely to take your bid seriously if you come preapproved.
Can the Amount Be Increased?
Yes. If your preapproval doesn’t stretch far enough, you may be able to qualify for more. Lenders are willing to revisit their numbers if you can demonstrate stronger financial standing—whether through income, credit, or reduced debt.
Steps to Qualify for a Larger Loan
1. Strengthen Your Credit Score
Your credit score directly affects your interest rate, and a lower rate means more affordable payments. With smaller monthly obligations, your debt-to-income (DTI) ratio improves, and that can allow you to qualify for a bigger loan. Raising your score can be as simple as paying bills on time, keeping card balances below 30% of their limits, correcting errors on your credit report, or asking for higher credit limits.
2. Show More Income
A higher or more consistent income tells lenders you can handle a larger mortgage. Beyond salary, you might be able to use rental income, investment dividends, alimony or child support, part-time work, or Social Security benefits—provided the income is steady and documented. In some cases, even a family member’s income can help if they’re added to the loan.
3. Lower Your Debt Load
Since lenders closely examine your DTI ratio, reducing your monthly debt can make a big difference. Paying off a high-payment credit card or personal loan could free up hundreds each month, instantly improving your qualification. Alternatives include refinancing an auto loan, consolidating credit cards, or using a balance transfer card to reduce interest charges.
4. Shop Around With Multiple Lenders
Different lenders often offer different loan amounts. By getting at least three quotes, you not only increase your chances of finding the lowest rate but may also discover a lender willing to preapprove you for more. Competing offers can sometimes be used as leverage with your preferred lender.
5. Buy Down Your Interest Rate
If you have available cash, purchasing discount points to reduce your mortgage rate can lower monthly payments enough to bump up your approval amount. While it’s an upfront cost, the long-term savings can be substantial.
6. Add a Co-Borrower
Bringing in a co-borrower with solid income and good credit can improve your overall financial profile in the lender’s eyes. Just remember: their debts count, too. If they carry high balances or poor credit, this strategy could backfire.
7. Build Up Assets
While not always required, showing lenders that you have healthy savings or other cash reserves makes you a less risky borrower. Having these resources can push your preapproval higher.
8. Increase Your Down Payment
The more you put down, the less the lender has to finance. If you can hit the 20% mark, you’ll also avoid private mortgage insurance (PMI), which reduces your monthly costs and strengthens your loan application.
How Much Could You Get Preapproved For?
There isn’t a single formula that dictates preapproval amounts. Underwriters consider many factors, including income stability, employment history, debt levels, and overall credit profile. In general, borrowers with strong credit, minimal debt, and reliable income streams tend to qualify for the largest amounts.
If your initial mortgage preapproval falls short of what you need, don’t panic. By improving your credit, managing debt, boosting income, or adjusting your financial strategy, you can often qualify for more. A higher preapproval not only gives you more options in the housing market but also positions you as a stronger, more competitive buyer.