Purchasing our first home, and not sure where to begin with application.

Hi Reddit,

My girlfriend and I are purchasing a home. Her aunt lives a mile down the road, and offered to sell her home at a very good price as she is moving. She's even gifting us some equity (Home valued at $150,000, getting $15,000). We will not be using an agent or realtor as this is set in stone pending our mortgage approval. We even have a family friend who will draft a contract for us. We have all the necessary paperwork (bank statements, rental history, tax returns, etc.) My questions:

1. If we close August 1st, is it too early to apply?
2. We were told by the loan officer that we need a contract before applying- is this true?
3. In essence, what are we understanding about this process? We have our financials in order, and just want to make this as simple as possible. Apply. Approve. Move in.

We've been hearing a lot of different things from a lot of different people with no clear answer as to what we need to do before applying other than collect what we have. I've been told prequalification is not necessary. BMO is who we are using as a lender. Any advice would be appreciated.

Thank you,