Obtaining a pre-approved mortgage gives you confidence and buying power. It allows you to know how much you can afford to spend and how to finance it.
It is a way to show you have mortgage financing arrangements in place and can indicate you are a serious buyer. It also gives you security to negotiate prices that fall within your budget.
Typically, financing is based on your current financial situation and credit rating. It also includes information regarding interest rates, terms and payment amounts.
In a competitive market, it can also give you an edge over other buyers who are not financially stable. The pre-approval is a commitment from a lender once all your financial details have been verified.