This question has a catch-22 flavor to it
because some lenders want to see a contract of sale before they process a
mortgage application, while some home sellers want to see a mortgage commitment
before they show you their house. The dilemma is more apparent than real,
however.
What a careful house seller wants is
assurance that you have the financial capacity to complete the purchase. You can
provide that with a mortgage pre-approval – a statement by a lender that it is
willing to make a loan to you of a certain size or that carries a certain
payment. You don’t need to shop for a pre-approval, because the price of the
loan is not specified. Further, you only need one pre-approval. See
Mortgage Pre-approval: What Is It Good For?
Once you have signed a contract of sale, you
shop for a mortgage. The target of your mortgage shopping is a firm price
commitment or "lock". You are in no way obligated to take your loan from the
lender who provided the pre-approval. In all fairness, however, you should
include that lender among those you shop.
Copyright Jack Guttentag 2007