A pre-approval is essentially a conditional approval. In other words, this means that the lender is approving your home loan subject to you finding a suitable home with a suitable valuation. This is not the final unconditional approval as it is only a conditional approval. To get a pre approval you must first submit all your information to your lender as you would do a normal loan application.
Why should you get a pre approval?
People get pre approvals for many reasons. Once you get the pre approval you can be confident that the bank has accessed your borrowing capacity to repay your loan. That is to say that the lender you have decided on is comfortable at the purchase price you are looking at. Having a pre approval will show real estate agents that you are indeed a serious buyer. As a result, you will be able to negotiate for better prices as your agent would take your offer more seriously.
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