Pre-approval, as opposed to pre-qualification, signifies that the loan application has already been taken through a rigorous process. Here's why pre-approved buyers are ahead in the home buying game:
If you make an offer on a home and then apply for a loan, you are at the lender’s mercy, who is aware that you do not have time to shop around.
By knowing ahead of time how much mortgage you can afford, you don't waste your time looking at houses that don't fit your budget. Avoid the disappointment that will inevitably come with falling inn love with a house you can't afford.
A pre-approval letter from a lender gives you an edge when multiple offers have been made on a house. Sellers know if you've taken the time to get pre-approved, you're serious buyers. This may also give you bargaining power!
Pre-approved buyers can generally close escrow more quickly, since most of the preliminary work has already been done. That makes you more attractive to sellers.