The first step is a pre-screening. This happens before you start to shop for a home. At this stage the lender will review your financial situation. The lender will look at your income, assets and debts to determine your eligibility to for a loan. The lender wants to make sure you have enough income to be able to pay the monthly mortgage, are able to make a down payment, and that you do not already have too much debt or people you owe money to. The lender will likely also check your credit reports and credit scores as part of the pre-screening process.
The lender at this stage will also tell you how much money they are willing to lend you and provide you with a pre-approval letter that you can use when making offers to buy a home.
Once you have been pre-approved, you are ready to move out to the the PURCHASE AND SALE AGREEMENT