Why Pre-Approval Should Be Your First Step

When buyers come to me to look for a home I always tell them to start with the preapproval.  If you don’t know how much you can afford you might be disappointed when you find your dream home and then realize you can’t afford the payments.  Also you can lose a home you love because a seller won’t accept an offer without seeing a copy of the preapproval letter and knowing that you can go through with the purchase if they agree to the offer.  If you are considering a new home, give me a call and I will recommend some mortgage brokers who can quickly and easily let you know how much you are qualified to spend.  It makes the whole process much smoother and more enjoyable for you!

Courtesy of Keeping Current Matters January 2017

Why Pre-Approval Should Be Your First Step | MyKCM

In many markets across the country, the number 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.” 

Freddie 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 we will find you your new home even if you have less to spend than you think!

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