Fair Isaac, developer of the ubiquitous FICO score, has a new warning for homeowners plotting a strategic default or walkaway: We can now spot you in advance. FICO has developed a black-box risk-identification tool that enables lenders and mortgage servicers to tag you months in advance -- and then pursue their own strategic measures to intervene.

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The house shopping process can be somewhat complicated and the same can be said for the loan shopping experience. Before you get to the fun of house touring and decision-making for your new life, a prospective home buyer needs to be pre-approved and fully understand what the pre-approval process entails.

"Pre-approval is more involved than just having a discussion with a lender," says Lawrence Finn, Jr., CEO Owner/Broker of Coach Realtors. Getting pre-approved for a mortgage loan is a review of your financial status and lets you know exactly how much you can spend on a home. The pre-approval letter given to you by the lender after the appointment, shows prospective sellers and real estate agents that you're a serious buyer. In addition, many sellers will require a pre-approval letter prior to reviewing your offer. "So lining up your financing ahead of time is a very important initial step towards buying a home", adds Mr. Finn.

At the time of the appointment with a mortgage lender, you will need to bring certain documents with you to verify your identity, assets and expenses. The lender needs to gather all of the required information in order to offer you a loan, and your credit report will need to be checked. A pre-approval letter in not an obligation to borrow with a specific lender.

Some of these documents needed for your meeting include:

A most recent W-2 (or entire tax form if self-employed)

A copy of a recent bank statement (including any money market or savings accounts)

Proof of IRAs, retirement accounts, stocks or mutual funds

Your driver's license

A recent paystub from work

Current expenses such as auto loans

To download a complete document checklist, please click here.

Whether you're all set to buy or just trying to figure out what you can buy, choosing a lender who listens carefully, has products for your needs, responds promptly, and treats you with respect is critical. The loan officers at Residential Mortgage Division, the official mortgage partner of Coach Realtors, are trained to ask questions that will give them a clear picture of both your current needs and future goals. They can help you customize a home financing program that will not only help you buy a home now, but one that can also start you on the road to overall financial success.

Remember: just because you are pre-approved does not mean you are guaranteed to receive a loan from that lender. The actual loan is granted after the bank conducts an appraisal on the home your intend to purchase to make sure you aren't paying more than the house's value. This prevents you from over-paying and protects the bank against any buyers who may default on the loan in the future.