It's one thing to consider becoming a homeowner. 

But what if you're serious about buying a house in the next few months? Getting pre-approved before you begin house hunting allows you to look at homes with confidence that you will be able to finance them. 

A pre-approval letter will reassure you that you are qualified for a mortgage. (And what if you discover a problem with your credit or have difficulty obtaining a pre-approval? Finding out sooner rather than later in the home-buying process is preferable.) This will also tell you exactly how much money a lender is willing to lend you. That means you can bypass any homes that are out of your price range. You'll avoid the heartbreak of falling in love with a location only to discover you can't afford it. (We don’t want that.)

Knowing your home budget (and how to meet it) will give you the assurance that your ideal home is within your financial means. Without a pre-approval, you have no idea what your purchasing power, mortgage amount, or cash required to close the deal are. 

Getting pre-qualified or pre-approved for a mortgage before beginning your search is one way to demonstrate that you are serious about purchasing your dream home. If you find yourself in a multiple-offer situation, which is more likely these days, pre-approval gives you an advantage. When a seller knows you're qualified to buy the home, you have a better chance of winning the bidding war.

Paul Centopani, Editor for the Mortgage Reports, explains:

“. . . most sellers won’t even consider an offer unless the buyer is pre-approved at the right price point. Sellers and their agents want to know you’re ready and able to finance your offer amount. So you’ll want to have your pre-approval teed up as soon as you’re serious about bidding on a home you like.”

Overall

Mortgage pre-approval means that a lender has reviewed your finances and determined how much you're qualified to borrow based on factors such as your income, debt, and credit history — which also gives you the clarity when planning your homebuying budget, confidence in your ability to secure a loan, and a competitive edge in a bidding war.