You'll need to fill out an application that tells how much you make, how much you've saved and how much you owe on everything from cars, to school loans to credit cards.

The lender will assess that, check your credit report and scores and reply with a letter saying you've been preapproved and for how much.

That's important because some real estate agents won't even show you a house or condo until you can show them that letter. It tells them that you're a serious shopper with the financial wherewithal to make a deal.

It's also your first chance to give some serious thought about how much you can afford to borrow and discover if you'll have any trouble obtaining such a mortgage.

Click here for a step-by-step look at what you'll have to do to get preapproved for a mortgage.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.