Do you plan to buy a home in the area sometime soon? Do you need mortgage financing to make your dream home a reality? If so, it would be wise to get pre-approved for a mortgage loan before you start shopping for a house. This article explains what pre-approval is, and how it benefits you as a buyer.Mortgage pre-approval is when a lender reviews your income, assets, debts and credit score in order to determine: (A) if you’re qualified for a loan, and (B) how much they are willing to lend you. The process can usually be completed within a few days.The idea here is to figure out how much you can realistically afford, before driving around town to look at homes.Some home buyers rush out and start looking at houses before they’ve even spoken to a mortgage lender. As a result, they sometimes end up wasting time looking at properties that exceed their budget and price range. That’s just one of the reasons to get pre-approved ahead of time.Three Reasons to Get Pre-Approved for a Mortgage:

1. It helps you narrow down the real estate market to the properties you can actually afford, based on your loan amount. This can save you a tremendous amount of time and energy.

2. It makes the seller more inclined to accept your offer, since you’ve been screened by a mortgage company already.

3. It gives you an added advantage in the marketplace, compared to a buyer who hasn’t been pre-approved.

Of course, if you’re planning to make an all-cash offer on a house, pre-approval doesn’t apply to you. You won’t need a mortgage loan. But most home buyers do use loans to help finance their purchases. If you fall into this latter category, then a mortgage pre-approval would be a wise move. Loan Application, Documents and Pre-Approval letter. The pre-approval process itself is fairly straightforward, though it can vary slightly from one mortgage company to the next. You’ll probably start the process by completing a standard loan application (full name: Uniform Residential Loan Application). You can find sample applications online, if you want to see what it includes. The lender will also request a variety of documents to be used for verification purposes. These documents typically include tax returns, W-2 forms, pay stubs, bank statements and the like. The mortgage lender will probably pull your credit reports and scores as well, to see how you have borrowed and repaid money in the past. Based on all of this, they will issue a pre-approval letter that you can use when making an offer on a house. The pre-approval letter shows sellers that you are serious about buying their home, and that you have your financing squared away. This works to your advantage.