If you are actively searching for a home, there is one thing that absolutely must be on the top of your “to do” list.


It is a (conditional) written commitment from your mortgage lender that states the loan amount you are approved for. Pre-approval should not be confused with a pre-qualification on a loan, however. Pre-qualification is a preliminary step that does not require as much financial information and, because of that, is not a sure thing. In order to get pre-approved for a loan, you will need to provide all of the information necessary for your lender to conduct an extensive review of your financial background.

Getting approved for a loan is something that, of course, needs to happen regardless. So taking the time to get pre-approved with your lender will make your home buying process significantly easier.

First, once you have been pre-approved for a certain amount it allows you to start shopping within your budget. If you are approved for a $100,000 loan and are able to contribute a $40,000 down payment, you know exactly what price range you should be looking in. Without the pre-approval, you may spend a significant amount of time and energy looking at homes that you will never be able to buy.

Besides making the entire home shopping experience easier, there are many sellers who will only consider buyers who have been pre-approved. And the sellers who do not require a pre-approval letter? Well, there are many who will take your offer more seriously because you have been pre-approved. While that is not a guarantee, having it will definitely put you ahead of the game.


As if that was not quite enough, having a pre-approval letter can even save you some money. Sellers may be more willing to lower the asking price, cover closing costs or even make other allowances.

Now, how do you get started? Start talking with your mortgage lender. The sooner you have been pre-approved, the sooner you can start a home buying experience with ease (and potential savings)!