Why Getting Pre-Approved Should Be Your First Step

In most markets across the country, including our own, the number of
buyers searching for a home is far greater than the number of homes for sale.
This condition has led to a competitive marketplace where buyers need to stand
out. One way to show a seller you're serious about buying a home is to get
pre-qualified or pre-approved for a mortgage before starting your search.
Knowing your legitimate budget will give you the confidence of knowing if your
chosen home is within your reach.

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Among the advantages of working with a local real estate professional such as myself is my relationship with lenders who will work closely with you in this process, unlike the big financial institutions where you'll slide your application across the desk and never meet face to face with anyone who can go to bat for you. Once you've selected a lender, you'll need to provide some important information regarding your income, credit, debt, work history, assets and residential history.

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Freddie Mac describes the 4 Cs that determine the amount you'll be qualified to borrow:
 

• Capacity: Your current and future ability to make your payments

• Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash

• Collateral: The home, or type of home, that you would like to purchase

• Credit: Your history of paying bills and other debts on time
   

Getting pre-approved is the first of many steps that will show home sellers that you're serious about buying, and it helps speed up the process once your offer has been accepted.
 

Bottom Line

Many prospective home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you're ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

 

Need a lender? I recommend these proven professionals.