OBTAIN A PRE-APPROVAL / PROOF OF FUNDS
This often overlooked step should be the first thing any serious buyer does BEFORE looking at properties. A pre-approval indicates that you have spoken with a mortgage broker, and based on certain criteria (credit, income, debt-income ratio, etc.) you have been deemed a suitable candidate for a mortgage. Getting pre-approved is a must before searching for a home because:
There is nothing worse than falling in love with a home only to find out that you cannot afford it. By getting pre-approved, you will know the price range you can afford as well as the terms of the mortgage (down payment amount, interest rates, and length of mortgage). Importantly, for many buyers the monthly COST of any given home, rather than straight out house price, is the critical deciding factor in determining what homes are appropriate for you to consider and tour.
Having a pre-approval letter ready will expedite the process of submitting an offer. This is especially important when working with a property that has multiple offers.
This will show the seller that you have the funds to make the purchase. POF can be accomplished by a recent bank statement, letter from a banker, or sometimes just a screenshot of your current balance.