When considering the purchase of a new home, you may not know how much lenders will be willing to lend to you. Therefore, you won't know the price range of the homes to consider. To solve this problem, it is a good idea to seek mortgage pre-approval. A mortgage broker can work with you in advance of obtaining your actual mortgage to pre-approve you for a certain size of mortgage. This way, when you find a house valued less than or equal to the pre-approval amount you are assured that a mortgage will be available to you for the required amount.
One advantage of pre-approving your mortgage is that this generally guarantees your interest rate for a period of time and for a certain mortgage amount.
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