Pre-qualification is an important step that will provide with some great advantages. Being pre-qualified will benefit you, your agent, and your seller. Of course, even benefits to agents and sellers will ultimately translate to good things for you, like getting the house that you want.

The number one advantage to getting pre-qualified is knowing how much you can afford in a house. This question may seem easy at first, but there are so many factors involved, like credit history, income, debt, different mortgage types and special programs, that there may not be a simple answer. Pre-qualification will give you and everyone else involved a better idea what you should be looking for. It's a simple step that pays great dividends.

Your agent will also benefit from you pre-qualifying for your mortgage. Your agent will be able to conduct a more focused search, looking only at houses that meet your needs and reducing the number of inquiries that go nowhere. Having a better idea of your price range will make things easier for your agent, and give you more good options as well.

Pre-qualifying will also make things easier on your seller. Being pre-qualified will strengthen your bargaining position and make your offer stand out. A seller would likely rather take a bid from a pre-qualified buyer even if it is slightly lower than a bid from a buyer who is not pre-qualified. A seller would prefer the security of pre-qualification to the risk associated with another buyer.

One last note about pre-qualifying - just because you qualify for a certain dollar amount, doesn't mean you should necessarily spend the full amount. For example, if you pre-qualify for $150,000, you might want to look at houses that max out at around $140,000, to leave yourself some room for unexpected costs and not spread yourself too thin financially.