1. Determine how much you can afford to spend on a home. A pre-approval shows you how much you can afford to spend on a home based on your debt, income, and credit.

2. Increase your bargaining power. Knowing how much home you can afford can give you more bargaining power when negotiating with a seller.

3. Determine what your total investment will be. You will have an estimate of how much money you will need for closing costs and a down payment.

4. Estimate what your monthly payment will be. You will be able to tell (approximately) what your monthly principal, interest, taxes, and insurance will be.

5. Identify which loan program will fulfill your needs. There are many loan programs. It is important to know which you qualify for and which will fit your needs.

6. Evaluate your debt and credit history. Restructuring your debt to improve your credit score could potentially help you afford a home and have lower monthly payments.

7. Add validity and strength to your offer. Sellers are more likely to accept your offer when they find out you are pre-approved.

8. Make sure your financial documents are ready. You will know at pre-approval which supporting financial documents need to be submitted with your application. This will help speed up the loan approval process.

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