Before you start house shopping, it is a good idea to find out what homes are in your price range. This can be done through a simple process called pre-qualification. Pre-qualification is a written lender's commitment that lets you know how much home you can afford. Pre-qualification helps define your home search by determining your price range. Because the credit review stage is complete, getting Pre-qualified places you several steps ahead in the mortgage process.
 
 
Why Get Pre-qualify For Your Mortgage?
Being Pre-qualified for your mortgage means that you have sat down with a mortgage broker, provided income statements, had your credit checked, and been given a letter from the mortgage lender stating that you will most likely 
qualify to a buy a home within a certain price range.

When you formally apply for the mortgage later on, then it will be sent to the bank's underwriting department where it is reviewed, approved, and the paperwork is drawn up. The underwriting process can take a few weeks to complete. 
Being Pre-qualified will tell you well ahead of time if you are going to face a major problem during underwriting. More often than not, during underwriting, the bank will require more information from you including bank statements and letters explaining anomalies in your finances. Get the bank whatever information it needs as soon as possible!
 
Getting Pre-qualified does many good things for you. 
First, it tells you exactly how much house you can afford. Nothing is worse than touring a home, getting excited about it, making an offer on it, and then finding out you can't get approved for the mortgage. 

Second, when it comes time to make an offer, being Pre-qualified makes your offer look better than other offers. It's one less thing to worry about which makes your offer more appealing to the seller. 

Third, it gives you a chance to lock-in a rate without being obligated to anything. If rates go up, you're locked in at the lower rate. If rates go down, you're not obligated to anything and can re-apply. 

Fourth, your mortgage broker will tell you what the approximate closing costs will be so you can plan for it and not be taken by surprise a month later.

And fifth, in many "hot" markets, many home sellers and their agents will not even let you schedule a tour of a home for sale unless you are Pre-qualified.