Speak with a loan professional before you start to shop for a home! It's important to know how much home you can afford, and obtain a written pre-approval letter. These steps will put you in a superior negotiating position once you find the right property.
Pre-qualification is an informal discussion between the borrower and the lender. You'll learn how much you can afford and approximately how much the monthly payments will be. Getting pre-qualified is not a guarantee of a loan, and is different from getting a loan pre-approval. The lender verifies nothing, but relies completely on what you tell him about your income, assets, debts, etc.
Pre-approval is a more formal process in which the lender will actually verify employment, income, assets, liabilities and cash available to make a home purchase. Pre-approval is a bit more work than pre-qualification, and takes a little longer. A pre-approval letter from a reputable financial institution is considerably more powerful than a pre-qualification letter. It provides the seller with reassurance that your financing and your offer are secure. It also provides you with peace of mind, knowing that you can complete the acquisition of your chosen home without any surprises.