It is important to understand the difference between pre-qualified and pre-approved.

A pre-qualification letter is basically worthless in that it does not commit the lender to make a specific loan. A lender or real estate agent has just done some quick calculations to estimate the size of the loan for which you are likely to qualify.

Pre-approval is a much more formal procedure in which a lender requests documents such as pay stubs, bank statements, tax forms, and runs a credit check. The lender will issue a letter or certificate saying you are pre-approved for a loan of a certain size. A pre-approval does not guarantee that you will get a certain interest rate, but you can seek a lender that will let you lock in a rate for 30 to 60 days. Make sure the rate-lock has a float-down option that ensures that if rates drop the pre-approved rate will also drop. A pre-approval should come with a minimum of conditions, like satisfactory appraisal of the home being purchased and verification of employment and financial information.