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We went to our bank that we both had been banking with for years.

You can get pre-approved online-there are a lot of websites. And don't worry about getting approved for "too much"--they will almost definitely approve more than the recommended-by-most-people 3x your salary, but you control how much you will spend, and you know your debt and monthly expense load and can make an educated expense on your own. Meaning, if they approve you for 900k but you know 500k is more reasonable with childcare, etc, then you only look at houses in the 450-500k range.

We actually found a realtor first - they recommended a few lenders they regularly work with who are reliable and responsive.

For the actual preapproval, we had a phone call as the first step, and they asked how much we made, what area we were looking in, and how much we'd want to be pre-approved for. I'd looked at our budget and figured out how much we'd be comfortable with using online calculators, and told them that figure, and he said it should be no problem as long as we didn't have any significant credit issues. Then we met and provided them with documentation, they asked if we wanted to be pre-approved for more, and when I said we were really firmly not wanting to spend above what I had calculated, we were approved pretty immediately.

My brother had been pre-approved for a higher amount than he could actually afford because the bank told him it'd be fine, and he's been house-poor ever since - so knowing what you're comfortable paying is a really good first step!

Is your situation boilerplate, or do you have any special considerations, like self employment, new at a job, worked abroad, not citizens? If so, get all your paperwork togther, you will likely have additional documents to fill out/hoops to jump through. Not every lender is going to be set up to be able to handle these situations, as I learned.

We used this online calculator that included PMI to get a rough estimate on what we want to pay.

http://usmortgagecalculator.org

Oh, the default for interest rate for that calculator is 5%. Interest rates are around 3.5-3.75 at the moment. If your credit is not as good, I would estimate that the interest rate would be higher. Then we internet shopped to see what was out there. Since some funds are tied up in relocation costs and I will be reimbursed shortly, I got pre-qualified. Which not ideal.. Pre-approved is ideal and actually required documentation like pay stubs and w2.

I'm now getting pre approved because we found a house and I should be getting reimbursed on some of the things I had to pay for in the relocation.

Since I'm new to the state, I'm struggling to figure out what bank to choose to get preapproved. Big or small bank? Local? Credit union or regular bank. I have been preapproved a few years ago when we considered buying a house and we just used the same bank we have (I still have it, but it on the west coast and we are now on the east coast). My bank would have access to my account. Would that make things easier? I don't know.

I think I want to go with a local and smaller bank so they can get me pre approved quicker.

I do admit that I should have gotten preapproved sooner but I was so busy with the move and I am wondering if the added debt from relocation coasts (that will be reimbursed) would affect my preapproval. Yeah, I'm not sure what I should do. All at the same time, we want to buy a home fairly soon. I'm just dancing at this point, trying to take steps forwards but realizing that maybe I should wait.

Oh, I'm getting some closing costs assistance through my relocation package but requires one of two large (notoriously known to be slow) banks. I'm think we are going with a small local bank that should help us close faster.

We had our realtor suggest a mortgage broker, and he did a pre-qualification rather than a preapproval. He also sent us breakdowns for hoe much we should expect to spend on closing costs and an estimate of what our monthly costs would be with a few different house prices.

Yes I would talk to a realtor (free for you). They can also help guide you through what "other" costs you can expect to be rolled into your mortgage (so you can figure out what you can pay) and what other costs will come up during closing.

My personal experience was to start by getting pre-approved with a lender that my agent had worked with in the past. Then I shopped around the various banks to find one that would get me the best combo of rates/fees. Getting pre-approved will require running your credit score. Once you have your credit score, you can ask the other lenders to give you an estimate for rates/fees.

You won't pay any money until you have reached mutual acceptance on a home. At that point, your lender will want a deposit to lock the rate & do the appraisal. After that, you shouldn't be paying any more money to the lender except through the escrow process.

@math.nerd: We just went through the home-buying process. We knew we wanted to stick with our credit union for our mortgage so we did our pre-approval through their online application. A lot of lenders will have this option. That being said, pre-approvals expire after a certain number of days - I think ours was 90. So if you're still in the very early days of thinking about buying, you might not want to get officially pre-approved yet. The actual pre-approval, once the application is submitted, can happen very fast, so don't worry too much that you may find a house you like and not be able to get pre-approved in time to make an offer.

You might want to start by gathering any documents you might need - pay stubs, two years worth of income tax returns, any information you have about investments and other assets, etc. Crunch numbers to figure out what you reasonably want to spend - you WILL get pre-approved for more than you want to spend, that's almost a guarantee - so it's good to agree on a budget upfront and stick to it no matter what. Remember, if you look at home prices and mortgage estimates on sites like Zillow, you pretty much want to double what their estimate is for a monthly payment, because you'll be taking into account things like PMI, taxes, homeowners insurance, etc. You can always start working with a realtor to casually look, as well, because he/she will be able to pull much more specific information on homes and prices than you can find looking on your own. A realtor may also have good recommendations for a lender/broker.

Lastly, you shouldn't have to pay anything upfront. All costs are usually rolled into closing - something else to take into account for expenses!!

Good luck!!