When starting the house search process, one of the first steps is to figure out how much you can afford to pay for a property. A reputable loan officer will take some of your information, like your work history, yearly earnings, savings, debts, etc. Your credit will also be run to figure out your score. All of this information will help the loan officer figure out what you qualify to buy. This is the pre-qualification part of the process. Sometimes, you will receive a pre-qualification letter, stating how much you can afford to purchase.
After you complete the qualification process, the search will become more focused. The loan officer will provide a pre-approval letter that could include the specific property address and/or the purchase price. The pre-approval letter is the document used when submitting an offer to purchase real estate. It is rare for an offer to be accepted without a pre-approval letter.
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