It will establish what price house you can afford and what the monthly payments will be. You can ask your lender what to expect, and have them review the amount of money you will need to purchase at this price range (how much will be required for both the down payment and the closing costs).

When you find the home you want to buy, it will put you in a stronger position when your contract is presented—your Realtor® can let the Sellers know that you are “pre-qualified”, which provides them a better comfort zone related to your upcoming financing requirements as well as a competitive edge with relation to other competing offers.