After months of surfing the internet, watching television home shows and reading home improvement/decorating magazines in search of the perfect house... you think are ready to make you move?!
I frequently get phone calls and email from eager buyers who have already chosen 10 to 15 homes from the MLS to view on their first day of "The Hunt". In that initial conversation I ask them if they have been pre-qualified with a mortgage banker? Most have not.
Apply first for your home mortgage before you begin your search. The lender you choose should be able to give you good advise to tweak your credit scores for the best possible rate. Most important, your lender will give you the price point you are approved to purchase.
You should discuss your goals regarding your monthly budget. Just because you are approved for an amount doesn't mean you need to buy at that price point. Make sure your lender and your Realtor understand the price range that makes you most comfortable. A good Realtor will listen and not bump you up.
Once you have applied and qualify, your lender will give you a pre-qualification letter. That letter is an important key to making a serious offer when you find the right house. Sellers don't want to engage in negotiations with buyers who can't prove they have been pre-qualified.
Another reason it's important to know your qualified price point before you start searching is to keep your emotions and energy from becoming invested in something you can't have! Once that happens, you'll find yourself comparing all the other homes to "the one that got away"!
(On a side note, if you are self employed, you may find the process much smoother by getting "pre-approved" first rather than the initial pre-qualification.)
Finally, make it a point to get all requested documentation to your lender as soon as possible. Count on being asked for documents and explanations that seem extremely intrusive. Don't get offended when they ask. If you put yourself in the lender's shoes and a stranger asked to borrow a large sum of your money, you would probably want a DNA sample and their first born!