Once you have been pre-approved by the lender, they will provide you with a letter that will show you (and others) how much you are able to borrow.

Here are 4 reasons why getting such a letter is a great idea!

1. To effectively house hunt, you need to know the amount you can borrow from a lender. This will save you from wasting time viewing homes you cannot actually afford. There is absolutely no sense in spending your valuable time viewing homes that are not even within your price range.

2. A letter stating that you are pre-approved is an especially favourable point in a close, multiple-offer situation. It will show the seller that you are a serious buyer. Sellers tend to be more comfortable negotiating with a buyer who proof of being pre-approved. In fact, many sellers now demand that such a letter accompanies all purchase offers.

3. You will feel more confident about making an offer with a pre-approval letter in hand and the knowledge that you'll be able to obtain a mortgage. Imagine how disappointing it would be if you put an offer in on the home of your dreams, but then found out that your loan has been denied?

4. Some real estate agents won't even show property to or submit an offer for you, if you don't have a proof of being pre-approved. If you don't have a loan pre-approval, they may well be wasting their time showing you or putting offers in on homes that you cannot even afford. Having a letter of pre-approval signals to your real estate agent that you're a well-qualified buyer who is serious about purchasing a house.

Very simply, a letter showing your pre-approval status is good for both the buyer and the seller. If you are seriously interested in purchasing a home you would be smart to get a mortgage loan pre-approval. It could affect whether you get the home of your dreams!