When your real estate agent goes to present an offer to a seller's agent, there had better be a pre-approval letter in the package.  For many home buyers who have spoken with a lender, there is some confusion about the difference between being pre-qualified and pre-approved.  The difference is simple; proof.  A lender can pre-qualify a borrower over the telephone.  The borrower can tell the lender he has an 800 credit score and no debt, makes $30,000 a month and have $2,000,000 in cash reserves.  That's great, but only if it's true.  A certain percentage of people lie.  His credit score may actually be 580 with considerable debt, judgments and liens.  The income may be $3,000 a month without any cash reserves.  The point is that until the loan officer has the credit report and supporting documents, a borrower's true qualifications to purchase a home are no more than wishful thinking.   

The first step to any home purchase process should be getting pre-approved for a home loan.  Keep in mind that a pre-approval is not a commitment to the lender who performs the service.  It is normally a free service.  At most, some lenders will require you to pay for the credit report.  (Maximum $25.)  If you pay, get a copy.  You should also get a Good Faith Estimate and Truth In Lending statement.  (GFE and TIL.)  These are quotations you can use to comparison shop.