Why Getting Pre-Approved Should Be Your First Step

approvedIn southwest Florida sellers require a pre-approval letter be included in the paperwork with an offer.  What is the point of negotiating a sale with a buyer only to find out they can’t afford the house anyway?  I work with very good lenders who can easily and quickly get you that pre-approval letter.  All it says is that if the things you are telling them are true you qualify for a mortgage of a certain amount based on your debt to income ratio.  They do run your credit but they don’t ask for all the paperwork they will need when we find that perfect home for you and they are working to get your mortgage in place before closing.  Pre-approval is a painless and quick process.  Call me for help and don’t be one of those buyer who are looking at homes that are out of their price range and then are very disappointed when they can’t get a mortgage.  This article will help you prepare for the pre-approval process.

Courtesy of Keeping Current Matters September 2016

In many markets across the country, the amount of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

mortgageFreddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

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

Bottom Line

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

Remember it is always toasty in Naples and you deserve your piece of Naples sunshine and the smoothest transition to closing on a home of your own!

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