The main reason it should be among the very first is that a preapproval gives you an idea of how much you can borrow. It lets sellers know you have the borrowing power to back up an offer. It also signals to real estate agents, that spending time on you could well pay off with a transaction. (Remember they work on commission)

Basically, getting preapproved for a mortgage will signal that you’re serious and you aren't messing around.

1. You’ll get a better idea of how much you can borrow.

This process takes all the nostalgia out of the shopping process and brings you down to earth about how much you can afford.
It will give you a realistic picture of your buying range and will save the time of the real estate agent and your time shopping as well. 

2. Your offer might be more competitive. 

If you have a preapproval letter, it lets sellers know a lender has reviewed your current financial situation and conditionally determined you can afford to buy a house. This gives sellers confidence that the process is unlikely to get derailed because you can’t secure financing.

3. You’ll uncover problems.

Each lender’s process is different, but they will generally review your credit history, income, assets and debts before granting a preapproval. What they uncover can alert you to potential problems that may prevent you from obtaining a mortgage.

“Out of every 10 people I talk to, six have work they need to do before they’re ready to get a loan.”

That may mean paying down debt to improve your debt-to-income ratio, saving for a larger down payment or resolving inaccuracies on your credit reports. Whatever it is, if you go through the preapproval process, you can take care of the issue before you begin your home search. If not, you could be in for an unpleasant surprise when you make an offer.

For more information email Ben Sweeney at bsweeney@fcmtn.com.