When it comes to financing your next real estate investment, be aware choosing your lender/mortgage representative is more than just about finding the best loan rate using Google.
Unfortunately I have witnessed past clients suffer through the financing phase due to their poor choice in a lender. As a rule when working with a buyer I will make a recommendations of local lenders who I believe will work best with you, with your overall satisfaction as the goal. I will suggest lenders who operate with the same level of efficiency, professionalism, courtesy and knowledge which I offer to my clients and customers. After all, my recommendation, and your reaction to it, is a reflection on me.
A true professional will be able to find you the best overall mortgage product that matches your objectives. Your mortgage should include the best available interest rate, but it will also include other criteria which match your specific objectives. These may relate to terms of service (number of years for re-payment), previous credit issues, down payments options, and if needed options for supplementing down payments through a 2nd line of credit. A qualified financing representative should take the time to go over all your options and assist you in the appropriate financing choice.
All information related to your income, expenses, buying power and maximum purchase price is confidential between you and your lender. Not even I will know the amount you are capable of paying, which of course could be different than what you would be willing to offer. I will rely on your personal knowledge as well as your communication with a lender to help define the price range for your property search. Based upon market insight, I may recommend viewing a property with a higher listing price if I have confidence there is negotiating room which bring the final price within your price range.
Be aware that a pre-approved buyer carries more overall negotiating weight when submitting an offer. A pre-approved buyer will have already met with the lender, and submitted information which gives them a letter documenting their purchasing strength. A pre-approval letter submitted with an initial offer gives the seller more confidence in the buyer's ability to ultimately close on the property.
After an offer has been accepted by both buyer and seller, a loan commitment letter is required, usually within 30-45 days from the "effective date" of the purchase and sale (the date all parties have signed). This stage, which follows other contingencies such as home inspections and other due diligence, brings buyer and seller even closer to the final closing.
Becoming pre-approved shows you are a serious and qualified buyer. By no means does it put you in position where you are making a premature commitment to purchase.