Mortgage Preapproval in Dallas: When, Why and How

What's the difference between prequalified and preapproved?

A preapproval means a lender has checked your credit and reviewed your income and asset documents. A prequalification is an estimate based on what you told them. Sellers and listing agents give a preapproval far more weight.

The letter states a maximum loan amount or price, the loan type and how long it is valid. Even a preapproval is not a final loan approval: the lender still needs the appraisal, the title work and a final check of your file.

Documents to gather for a preapproval

• Recent pay stubs and two years of W-2s, or two years of personal and business tax returns if you are self-employed.
• Two to three months of bank and investment statements, with an explanation for any large deposits.
• A gift letter if family is helping with the down payment.
• Details of other debts, any properties you own and, if you are selling one, its expected sale.
• Permission for the lender to pull your credit.

Gather these once, in one folder, and the lender can update your letter for each offer quickly. Large unexplained deposits slow files down more than anything else, so tell the lender about them up front.

When should I talk to a mortgage lender?

Before you start touring seriously, ideally a few weeks ahead. That gives you time to fix a credit report error, move funds into place or gather tax returns before you find the house.

You can buy without a preapproval if you pay cash. You will provide proof of funds instead. With a loan, skipping preapproval costs you time when the right house appears, because most sellers expect the letter with the offer.

1. Talk to one or two lenders and compare their Loan Estimates.
2. Get the preapproval letter, and ask the lender to update it to match each offer price.
3. Do not open new credit, change jobs or move large sums without telling the lender first.

How much house can I afford in Dallas?

A lender decides the maximum from your income, your monthly debts, your credit and your cash. You decide the comfortable amount. Those are often different numbers.

Lenders look at your debt-to-income ratio: the new housing payment plus other monthly debts, compared with your gross monthly income. In Dallas, property taxes are a large part of the payment, so two homes at the same price can lead to different maximums. Work backward from the monthly amount you are comfortable with, including taxes, insurance and HOA dues, and let that number set your search range.

What would my payment be on a $1.2 million house?

It depends on your down payment, your rate, the home's property taxes, insurance and any HOA dues, so only a lender can give you a real figure. What you can do is understand each piece, so you can check the number you are given.

• Principal and interest: set by the loan amount, the rate and the term. On $1,200,000, 20% down leaves a $960,000 loan, which is above the 2026 conforming limit of $832,750 for Dallas County, so it is a jumbo loan. With 35% down the loan is $780,000, under the limit.
• Property taxes: the appraised value times the combined local rates. Look up the specific home on DCAD. This part varies the most between homes at the same price.
• Homeowners insurance: a quote on that house, based on its age, roof and location.
• HOA dues: only if the home has an association. Check the resale certificate.
• PMI: on a conventional loan with less than 20% down, until it can be removed.

Give your lender the address, price and tax figure and ask for the full monthly payment, not just principal and interest.

Can I make an offer before my mortgage is approved?

Yes. Almost every financed buyer makes the offer with a preapproval, and final loan approval comes during the contract. The TREC Third Party Financing Addendum protects you while that happens.

In that addendum you can choose a number of days for buyer approval. If you cannot get approved within that time and give notice on time, you can end the contract and get your earnest money back. The addendum also covers what happens if the property does not satisfy the lender, for example through the appraisal. A shorter approval period makes the offer stronger, but only if your lender agrees it is realistic.

Do I need a jumbo loan to buy in Preston Hollow?

You need a jumbo loan when your loan amount is above the conforming limit, wherever the home is. For a one-unit home in Dallas County, the limit set by the Federal Housing Finance Agency for 2026 is $832,750. FHFA sets it again each year.

So the question is the loan, not the price. A large down payment can keep a Preston Hollow purchase in conforming range. If your loan is above the limit, expect jumbo lenders to ask for a higher credit score, more reserves after closing and full documentation. Compare jumbo lenders. Their terms vary more than conventional ones. For larger purchases, see luxury and investment.

What if mortgage rates change before I close?

If you have locked your rate, a change in the market does not change your rate as long as you close before the lock expires. If you have not locked, your rate and payment move with the market until you do.

Most buyers lock once they are under contract and know the closing date. Ask your lender how long the lock lasts, what it costs to extend if closing slips, and whether they offer a float-down if rates fall. Keep closing on schedule by returning lender requests quickly.

If rates rise before you lock and the payment no longer works, talk to your lender right away about a different loan type, a larger down payment or paying points. If your financing addendum's approval period is still open and you truly cannot qualify, that addendum is your protection.