I'm a real estate broker, so maybe you won't believe what I say. But my lips aren't moving as I type this.
Randy is correct that all lenders sell to the same investors, that is, the lenders who sell. Most communities will have a local credit union or cooperative bank (owned by depositors) that doesn't sell any of their loans, they hold them all in house. In my experience, these are the guys with the lowest rates and fees, and that's where I get my personal loans. The catch? They are typically very conservative lenders. As Randy suggests, make sure you review the good faith estimates and loan APR (not just note rate) to compare apples to apples.
I am dead against using your home to carry other consumer debt. Please don't do that. In your example, if you borrow $350K on a $300K residence you'll get an awful awful loan. And god forbid you come upon financial difficulty, you are better off having other consumer debt separate (you can choose to pay the home loan FIRST). I can't tell you how many people I've talked to in the past year who now owe 50% more on their house than they paid for it 4-5 years ago....anbd not because they have improved it, but because they paid off credit cards, car loans, etc. MULTIPLE TIMES. Now they are interested in selling, and I have to tell them that the place is no longer worth what they owe.
A preapproval simply means that they have run a credit report/score, and based on a quick interview of you for items like income, etc. you meet the lending criteria. These are generally "good" for 90 days or so, but in my experience they are only as good as the lender they are issued by. Certain companies letters are not worth the paper they are printed on....again, the smaller, local banks are more reliable.
And the best way to find a broker or lender? Referral from someone you know who has worked with them. Nothing else compares.