When seriously considering buying your first home, pre-quailifying allows you to find out what your budget is, as well as guaranteeing you the lowest rate available. It doesn't commit you to anything and takes very little time, but is well worth the effort!
A lender will look at your financial situation and your credit history to pre-determine a loan for you. You can do this either through your own financial instituation, or through a mortgage broker (who's job is to "shop around" at several financial institutions for the best rate and terms, at no cost to you). Meeting with a lender or mortgage broker before you begin searching for your first home gives you peace of mind, knowing what you are actually able to afford.
Pre-qualified mortgages are typically set for a period of 60 - 120 days. This allows you to lock in the current interest rate over this period, but also allows you to take advantage of a lower rate, if interest rates drop. Pre-qualification can often be done over the phone and via email with your bank or a mortgage broker.