Most mortgage lenders take the guess work out of applying for a loan by determining for you the amount you can afford to borrow. Then, they give you a printed document stating the maximum mortgage amount you qualify for based on your income and financial situation.
Mortgage pre-approval establishes your price range and strengthens your buying position by letting the seller know that you have already been pre-approved for the loan. It can also ease time constraints once the purchase agreement is signed between the buyer and seller.
One last thing to mention……pre-approval is different than being pre-qualified for a loan. Make sure your financial institution knows you would like to be pre-qualified for a loan. This process involves the financial institution doing a credit check. It’s not enough that your financial institution looks at your debts and income and tells you how much you can afford. One last thing, make sure you are pre-qualified within the last six months before looking at buying a property.