If you are considering buying a home, the first call you make should not be to a real estate brker, but to a mortgage consultant to start the process for a mortgage. You do not need to have a contract on a house before you can apply for a home loan. You can start the home loan application process as soon as or even before you begin to look around for a home.

The final steps are contingent upon the exact home (since an appraisal and inspection will have to be performed), but since the biggest part of a mortgage approval is the credit of the buyer, once this is out of the way, the mortgage can be issued more quickly.

Many savvy prospective home buyers today try to have pre-approval for their home loan before they start to seriously shop for a home, or at least at some point during the home search process.

There are three very good reasons for asking for a pre-approval loan.

Firstly, the buyer has a clear idea of how much he can now spend on a home, since he will have to stay within his home loan. Real estate agents will now be able to focus on the homes in the right price range for the buyer.

A second good reason is that a pre-approval letter gives the buyer a major advantage over other buyers. In a case where two buyers are bidding on the same property, the one with a pre-approval will have a clear advantage since the seller will not have to wait for the loan approval period.

A buyer can even use this pre-approval letter to lower the price of the house. When a buyer has a mortgage already promised, he can afford to offer a lower price since the sale of the home is guaranteed. Even if another party offers more, the seller has to decide if he is willing to take the risk that his mortgage is not approved.

Another reason to obtain a pre-approval for your mortgage is to speed along the whole process, since once you have a basic loan approval, the sale and closing will go much more quickly. The typically closing period of a month can be lowered to as little as two weeks.

You can抰 expect to get a mortgage pre-approval if your chances of obtaining a mortgage are small. Any borrower will have to go through the usual qualification process, which means his credit has to meet the lender抯 requirements. But since the main contingency in a home purchase contract, the mortgage, is taken care of, both the home search and the offer and contract procedures will flow much more smoothly ?pret hypothecaire.