Once you've decided you're ready to buy a home, you might consider applying for mortgage pre-approval, an option that could make financing easier. Pre‑approval is different from prequalification.

Getting pre‑qualified is the ‘light' version of getting a mortgage and can help establish the price range for your home search. Your lender will ask for your pay stub and evidence of other income. You'll be asked to estimate your monthly debt payments. Then the lender will estimate how much you can borrow and at what rate.

Getting pre‑approved is a step closer to getting a mortgage and carries more weight with lenders than prequalification. The lender may ask you to provide more evidence of your ability to pay and of your credit worthiness. The lender is not committed to giving you the loan, but a pre‑approval letter shows sellers that you are serious.

How does this affect the price? When you make an offer accompanied by a pre-approval, a seller may work harder at negotiating because he or she knows you can buy the house and are not bluffing. Once you make an offer, you won't have to wait for financing or lose out to others (who were pre‑approved) bidding on the same property.

It's a good idea to wait to get pre‑approval until you're ready to start the search and buying process, since pre-approval usually has an expiration date.