How to Increase Mortgage Preapproval Amount in a Smart Way

Buying a house requires careful financial planning. Finding the right balance between your home aspirations and the practicality of your monthly mortgage payment can pose challenges. One good way to know where you stand in the housing market is to get the right mortgage preapproval amount. In this blog, you can explore how to increase mortgage preapproval amount so that it aligns with your financial situation.

What does mortgage preapproval entail?

Mortgage preapproval is a confirmation provided by a lender indicating your likelihood of qualifying for a mortgage. When you secure a mortgage lender’s preapproval, it signals your seriousness to sellers and provides insight into your borrowing capacity and estimated monthly payments.

Simply put, it establishes the loan amount you can borrow for your home purchase and how much house you can afford.

A mortgage preapproval involves a thorough examination by the loan lender. That is to say, before granting preapproval, the lender assesses your financial situation. Which means checking details such as your gross monthly income, employment history, assets, and credit score.

You have the option to seek preapproval from multiple lenders. If you need more funds during your house hunt, you must consider increasing your preapproval amount.

How can a potential homebuyer apply for a mortgage preapproval?

The process includes submitting a basic application including details about your financial status such as assets, income, and debts. Based on this information, the lender issues a document stating whether you are preapproved for a loan, and if so, the amount you could potentially borrow.

It’s important to note that preapproval does not guarantee loan approval or a specific loan amount upon formal loan application. However, it signifies that you are likely creditworthy and possess the necessary funds to purchase a home. Often, home sellers require proof of preapproval before considering a buyer’s offer.

How does the mortgage lender calculate the preapproval amount?

Different lenders have their own criteria for determining preapproval amounts. The type of home mortgage you’re applying for also influences the amount. Generally, lenders assess your credit score, income, debts, and other financial aspects to estimate how much you could borrow.

Moreover, the lender evaluates the value of the property you intend to mortgage to ensure it sufficiently secures the loan and takes precautions to mitigate any risks.

What are the most effective tips on how to increase mortgage preapproval amount?

If you find your initial mortgage preapproval amount inadequate, you can pursue options to potentially secure a higher mortgage loan sum.

Keep in mind that before you proceed with increasing your mortgage loan amount, you must carefully evaluate whether you can comfortably manage the higher monthly payments. It’s crucial to conduct a realistic assessment of your budget before you buy a home.

Here are some useful steps to bolster your chances of approval for a higher mortgage loan.

Enhance your credit score

Increasing your credit score significantly influences your mortgage eligibility. A higher credit score or a solid credit report often translates to lower interest rates, thereby reducing monthly payments and potentially expanding your borrowing capacity. While a good credit score can indeed widen your financial options, it’s important to note that the increase in preapproval amount may be relatively modest. That said, it’s smart to check and improve your credit score before applying for a home loan.

Settle all your existing debts, if possible

Decreasing or paying your debt-to-income ratio is pivotal for enhancing your mortgage prospects. Repaying outstanding credit card balances or installment loans, consolidating debts, or minimizing monthly financial obligations can significantly improve your financial standing and augment your likelihood of qualifying for a more substantial loan.

Opt for a 20% down payment

Making a substantial down payment of at least 20% of the property’s purchase price can help you avoid additional expenses such as private mortgage insurance (PMI). By sidestepping PMI costs, you may qualify for a more sizable loan, potentially increasing your preapproval amount by up to 10%, according to financial analysis.

Explore diverse mortgage options

Fixed-rate and adjustable-rate mortgages (ARMs) offer distinct advantages. While ARMs may feature lower initial rates conducive to larger mortgage approvals, they entail the risk of interest rate fluctuations over time. Government-backed loans such as FHA and VA loans offer more lenient guidelines, providing borrowers with the opportunity to secure higher loan amounts.

Consider a more economical property choice

If increasing your mortgage preapproval amount proves challenging, you may want to explore more affordable housing alternatives within your budget. You can seek out housing options that are within a lower price range or offer better value for the cost. Maybe look at properties in different neighborhoods, consider smaller homes or condos, or invest in properties that may need some renovation work but are priced more affordably. By exploring these alternatives, you can increase the chances of finding a suitable home that fits within their means without stretching your finances too thin.

Incorporate a co-borrower or a co-signer

Securing a reliable lender can prove difficult when faced with a less-than-ideal credit score or limited credit history. In such situations, a cosigner becomes valuable. A trusted friend or family member may cosign a loan alongside you, leveraging their good credit history, stronger credit profile, and consistent, punctual payment record. This joint arrangement increases the likelihood of lenders approving your loan application.

It can also augment the total income considered for the loan application, potentially qualifying you for a larger mortgage sum.

Diversify your income streams

Your income profile directly impacts your ability to secure a larger mortgage. In addition to conventional sources such as salaries or wages, supplementary income sources such as investment dividends, rental income, alimony, child support, part-time job earnings, Social Security benefits, VA benefits, retirement benefits, side gigs, and bonuses can bolster your overall financial stability. All these can potentially increase your eligibility for a larger loan.

Accumulate cash reserves

Demonstrating smart financial management and maintaining cash reserves to handle unforeseen expenses can bolster lenders’ confidence in approving a larger loan, underscoring your financial stability.

Select a longer mortgage loan term

Opting for an extended loan term, such as a 30-year fixed-rate mortgage, can result in more manageable monthly payments. This may allow you to manage a larger loan amount without breaking into a sweat.

Seek multiple quotes from different lenders

Engaging in thorough loan comparisons for multiple rate quotes and loan offers can furnish valuable insights into varied preapproval amounts. A comparative analysis will help you in your negotiation for better terms, potentially securing a larger loan package.

How to increase mortgage preapproval amount: Key takeaway

The preapproval amount you receive is not always the maximum amount you can afford for your home purchase. If you believe your finances can accommodate a higher mortgage, there are steps you can take to increase your mortgage preapproval amount. This can include finding a co-signer or co-borrower, enhancing your credit score, increasing your income, reducing other debts, making a larger down payment, or consulting with another lender. A higher preapproval amount provides you with the flexibility to explore a broader range of homes that fit within your budget.

FAQs

How long is a mortgage preapproval good for?

Your mortgage preapproval is typically valid for 60 – 90 days. If this timeframe elapses, you’ll need to re-submit all preapproval documentation.

Can switching lenders increase my mortgage preapproval amount?

Exploring different lenders might be advantageous in potentially securing a higher mortgage preapproval amount. It could lead to finding a more favorable rate and/or preapproval sum.

How do lenders decide on your mortgage preapproval amount?

Your pre-approval amount is determined by various financial factors during your application. A lender looks at your debt, income, employment history, credit score, and assets.

What if I cannot qualify for a conventional loan?

Apart from traditional mortgages, you can explore alternative loan programs such as

FHA loans: These government-backed loans offer down payments as low as 3.5% and flexible credit requirements.
VA loans: These loans are only available for eligible active duty service members, veterans, and surviving spouses. They offer flexible credit requirements.
Home equity loans: These loans utilize existing home equity for investments such as purchasing another property.

Can I change the loan amount after pre-approval?

Yes, it’s possible to change the loan amount after pre-approval. However, it requires a reevaluation and reapproval from the lender.

Useful tips on how to increase mortgage preapproval amount was last modified: October 16th, 2025 by Ramona Sinha

Written by Ramona Sinha. October 8, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.