This is one of the questions I hear on a regular basis. First and foremost it is the very first step to take when you are ready to buy a home. You need to know how much your budget will allow you to spend on your home, without being over extended. We all want to go out for a hamburger every once in awhile! You also need to know if your credit report has any dings on it. You would be surprised how many times there are things on your report that you had no idea were there or worse yet they aren't even yours. If you just start looking at homes and have no idea what price you should be looking in or if you can even get a loan then it makes the search even more stressful, because you always have that in the back of your mind. What IF........
Now that I have explained why it is important to go to a lender first and get pre-approved, lets talk about the difference between pre-approval and pre-qualified. Pre-qualified just means that if the information you have given the lender is accurate then you could most likely get a loan, but no verification of information has been done and this does not mean that they will lend you the money for your new home. Pre-approval means the lender has checked your credit and verified the information you have given them and is ready to "show you the $$$$"! You are ready to purchase your home. Wow, see what a good position this puts you in when you have found the home that is just right for you. The seller will consider your offer much more seriously than someone who hasn't. If you find that someone else want the same home you do, don't you want to make sure that you are in the position to get the home? Of course you do!
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