If youre about to start house hunting, its best to go into the process armed and ready.

That includes lining up financing before you walk into your dream home.

Heres what you better know about how this document works in the homebuying process and how to get one.

A blue house sits at the edge of a dock surrounded by water.

What is a Mortgage Pre-Approval Letter?

While the terms pre-approval and pre-qualified are often used interchangeably, there is a slight difference.

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This is a long list, so dont get overwhelmed.

Go ahead and start now, but be sure to bookmark this post so you might easily return later.

Well keep it updated as offers changes or expire.

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The financial information they review will likely include things like your income, credit score and outstanding debts.

A pre-approval letter is oftentimes the most overlooked step in the home buying process, says Gelios.

This is why it helps to have your pre-approval ready before you actually need it.

Did you know?

Realtors will need this letter so you can be able to start showing you properties.

How to Get a Pre-Approval Letter

Getting a pre-approval letter is easier than you may think.

The best way to start is by finding a lender you like and completing a mortgage app.

you might find a mortgage lender through your real estate agent or local recommendations.

Keep in mind that just because you get pre-approved doesnt mean you have to go with that lender later.

you might always shop around rates with multiple lenders.

Once you approach a lender, youll be asked to provide some basic financial and contact information.

Youll also need to have a home loan amount in mind.

This is where knowing yourhome-buying budgetis important.

This is noteworthy because these credit checks can sometimes lower your credit score.

Your pre-approval letter is typically good for several months.

One final word of caution about pre-approval letters: Theyre not an absolute guarantee of getting a home loan.

Larissa Runkle is a contributor to The Penny Hoarder.

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