A pre-approved mortgage is a solid idea of the maximum amount of mortgage that you qualify for, along with an interest rate guarantee from a lender for a specified period (usually 60 to 120 days). It’s usually one of the first steps a home buyer should take when looking for a home or property.
A pre-approval does not absolutely guarantee that you’ll receive the funds (as the final amount may be subject to conditions), but it’s a very good indicator of the maximum amount you should consider when looking to purchase.
Your pre-approval process requires that you provide financial and credit score information to determine what size of loan you’re eligible for, based on lender and government requirements and regulations. And your down payment will be factored into the amount.
Most realtors prefer that you have a pre-approved mortgage in place before they take you out looking for a home or property. That way, they know they’re showing you the right properties within your affordable price range.