Dawn is right, ask them to "pre-qualify" you for a mortgage, the next stage can be obtaining a loan approval subject to the property, but pre-qualification will let you know what price range you can look at. Make your offer subject to your loan! The lender will take it from there after you have a signed contract. Good luck :)
what if you are using a hard money lender? I know they want to evaluate the deal since it is asset – based funding, but can you do any sort of preapproval with them?
You will need a pre-approved letter from the bank before you can make an offer in a property. Sellers would like to verify you have buying power before getting into a contract with you.
Pre-approved letters do expire, but you can always comeback to the bank and ask for a new one.
Go to the bank first. You want to have the letter to attach to any offers you make. Some sellers won't even look at your offer unless a bank has said you are able to get financing.
You want to do it before so you can at least have an idea of what you could qualify or what you can afford or better yet what you feel comfortable paying on a monthly basis. Think of it as a draft of your property monthly expenses... Also, depending on the property and the agent (if there is one) representing the seller 9 out of 10 will ask you for a pre approval letter or a DU (Desk underwriter approval) in order to even present our offer to the seller. Good luck!
Go to the bank first. You want to have the letter to attach to any offers you make. Some sellers won't even look at your offer unless a bank has said you are able to get financing.
As others have said pre-approval is the first step. One suggestion with pre-approval letters and offers below asking - make sure the pre-approval letter is very close to your offer price. If your offer is a "best and final" offer that amount should be listed in the pre-approval included in your offer. If you have some negotiating room, you could have the letter be slightly higher(but I would be short of your top-end price). If you send in a pre-approval for 300K on a 220K offer for 250K, the seller will know you can buy at full asking price. However if your letter was for 225K, they would be much more likely to get close to 230K in a counter.
You want to get pre-approved as early as possible in the process because obtaining pre-approval is a step with no dependencies. You don't even have to know which house you're looking to buy.
My VA loan pre-approval process took 4 months. It takes much less for conventional mortgages.