When starting your home search and looking for an agent, the first question a real estate professional will usually ask is "Have you been pre-approved?"

What is a mortgage pre-approval?

A mortgage pre-approval from a lender means they have verified and pre-approved the borrower to borrow a specific loan amount and possibly a specific mortgage type. It is the initial process of qualifying for a mortgage loan. The borrower has submitted the required financial information. This process usually requires pay stubs, bank statements, w-2's, social security number and an inquiry on the borrower's credit.

Why is pre-approval Important when home shopping?

• It can help you find a reputable and experienced REALTOR®. Many seasoned agents only want to work with buyers who have already been mortgage pre-approved before shopping for a home.
• Getting pre-approved by a lender at the start of your home shopping process will save you, and your agent, valuable time. Knowing how much you can afford helps narrow down your home search. You can avoid disappointment by shopping too far above your price range. This also helps you avoid settling on a home that may be under your budget that you're not 100% in love with. Your REALTOR® can now find the perfect dream home within your price range.
• Home sellers will take you more seriously. Having a mortgage pre-approval letter from your lender can give you an advantage when making an offer, especially if there happens to be multiple bids on a property. A seller may be more apt to accept the offer with the pre-approval backing it over an offer from a buyer without. The seller knows that your offer is less likely to fall through, and fewer issues to arise, knowing your lender has already gone through a screening process.
• It can help in negotiating a price if the seller is eager to sell.
• A pre-approval helps speed up the process when you are ready to purchase and your offer is accepted. You have already done part of the leg-work and there will be fewer hurdles to jump through.
• It holds more value than being pre-qualified. Receiving a pre-qualification from a lender only shows that you meet certain criteria to apply for a home loan. This usually only requires a few basic questions. It is not a great indicator of your ability to actually purchase or receive funding.

If you are accepted for a mortgage pre-approval:

1. Keep your finances operating as-usual.
2. Don't open any new lines of credit.
3. Don't fall behind on current payments.
4. Your pre-approval is usually valid for 60-90 days

How to become pre-approved

Requirements for Mortgage Pre-Approval

1. Proof of Assets
2. Good Credit
3. Proof of Income
4. Employment Verification
5. Any other two types of documentation: usually a driver's license or Social Security number

According to Investopedia, Consulting with a lender before the homebuying process can save a lot of heartache later. Gather paperwork before the pre-approval appointment, and definitely before you go house hunting.

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https://www.investopedia.com/financial-edge/0411/5-things-you-need-to-be-pre-approved-for-a-mortgage.aspx