Gone are the days when buyers could find their dream home first and then seek mortgage pre-approval. In today’s competitive market, this strategy is often ineffective for securing that dream home.

Most lenders offer the ability to pre-qualify for a mortgage over the phone, providing an estimate based on your income, debt, assets, and credit history. However, it's crucial to understand that being pre-qualified is not the same as being pre-approved. Pre-approval involves completing a mortgage application, undergoing a credit check, and verifying your employment and assets, which establishes the exact amount you can borrow.

A pre-qualification letter, which is not verified, holds little weight compared to a pre-approval in a competitive bidding situation. Being pre-approved not only clarifies how much house you can afford but also enhances your credibility as a buyer. It assures sellers that you have the financial backing to purchase their property.

Furthermore, ensure that you are pre-approved by a reputable lender. Recommended lenders include banks, mortgage bankers, credit unions, savings and loan associations, mortgage brokers, and online lenders. Be wary of lenders who misplace documents, seem disorganized, lack knowledge about rates and fees, or fail to provide accurate information. Choosing the right lender is as crucial as obtaining pre-approval itself.