Getting pre-approved is one of the most important steps in the home buying process, and it tends to be much more involved than many people think but very worthwhile. You will complete an official mortgage application, and then supply your loan consultant with the necessary documentation to perform an extensive check on your financial background and current credit rating.
From this, the loan consultant can tell you the specific mortgage amount for which you are approved. You will also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock-in a specific rate. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level.
This will help you hone in on exactly the homes you should be looking to buy. A mortgage pre-approval also provides you with an advantage when dealing with a potential seller, as he or she will know you're one step closer to obtaining an actual mortgage. The pre-approval enables you to move quickly when you find the home you wish to buy.