Getting pre-approved for a mortgage can be an important step to take during your home search.

How to get preapproved for a mortgage

You will have the opportunity to discuss loan options and budgeting with the lender if you consult with and obtain a pre-approval letter.

This step can help clarify your overall budget for house hunting and the monthly mortgage payment you can afford.

As a borrower, you must understand what a mortgage pre-approval does (and does not do) and how to increase your chances of obtaining one.

Pre-qualification vs. Pre-approval

You've probably heard the terms "pre-qualification" and "pre-approval" used interchangeably, but they are not identical.

With a pre-qualification, you provide a mortgage lender with an overview of your finances, income, and debts.

A mortgage pre-qualification can be helpful in this regard because it can provide you with an estimate of how much you are able to spend on a house.

As a result, pre-qualification is a useful starting point for determining what you can afford but has no bearing when making offers.

A pre-approval, on the other hand, entails filling out a mortgage application and providing your Social Security number so that a lender can run a hard credit check.

Before deciding whether or not to give you a loan, a lender will check both your credit report and your credit score to determine whether or not they should trust you with their money.