Pre Approved means that you can afford a house up to that amount of money. This is a good thing to find out before you go looking for a house, that way you aren't looking at 125,000 houses when you can afford a 100,000 one.
Just because you are pre approved doesn't mean they are going to give you that much. What should happen is, you select the house you like, determine the value of the house by looking at comprables, then put in an offer for less. Most banks, if you don't have 20% down will require you to get mortgage insurance. They will count the value of the house from the appraisal, so you might be able to get away with less down. For example, when I bought my house last year, they were asking 255,000. It's a new plan and the Comps were at 280,000. I assumed they didn't know what the house was worth because they were asking so far below market. I offered 230,000 as a firm offer, meaning no haggle. They accepted. My appraisal came back at a nice 293,000 amount. That means at 230,000 I have 63,000 in equity or 25% and could have qualified for not having any money down and no mortgage insurance, or taken a loan for 293,000 and gotten a check for 63,000 at closing. They sold this house on a by owner basis trying to save money, but any good real estate agent would have easily gotten them another $50,000. They did ok though, they bought the house preconstruction for 205,000 so in 9 months they made 25,000.
Get yourself a good buyers agent, or if you are signed on with an agent make sure they are not also working for the seller. Look at lots of houses, make the agent work and show you at least 20 houses before you go ok I want to look at these 3-4 houses.
A good website to find out what the house you are looking at is worth is www.zilow.com
Good luck!!! Buying A house is a poor investment compared to the stock market, but it's a safe investment, and you'll almost never lose.