Mortgage pre-approval is a process in which the mortgage lender reviews your financial background (credit score, income, debts, etc…) in order to find out whether or not you’re qualified for a mortgage loan in order to buy a home. Mortgage lenders will also tell you how much they are willing to lend you.
Getting pre-approved for a home loan, prior to shopping for a home, is absolutely essential and it benefits you in several ways. First, it helps you find a real estate agent. Most agents will only work with buyers who have been “vetted” by a lender — and who can blame them? This process also helps you identity any financial problems that need to be fixed. If your credit score is too low, or you have too much debt, you’ll find out about it during pre-approval. Last but not least, sellers will be more inclined to accept your offer.