Getting Pre Approved Should Always Be Your First Step

Dated: 04/16/2018

Views: 6

Getting Pre-Approved Should Always Be Your First Step

Getting Pre-Approved Should Always Be Your First Step | MyKCM

In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number 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, understanding 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.

Blog author image

Ed Sullivan

Ed believes "Every Family Should Feel Confident Selling and Buying a Home" and he has made this his personal mission in service to others. Earning your trust is how Ed prioritizes everyday for you an....

Latest Blog Posts

Time Ticking Away Do Not Wait To Move Up To Your Dream Home

Moving Up to Your Dream Home? Don’t Wait!Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values

Read More

Renters Under 50 Want To Buy A Home

Renters Under 50 Want to Buy a Home!Every year, the New York Federal Reserve publishes the results of their Survey of Consumer Expectations (SCE). Each survey covers a wide range

Read More

Access An Important Factor In Getting Your House SOLD

Access: An Important Factor in Getting Your House SOLD!So, you’ve decided to sell your house. You’ve hired a real estate professional to help you through the entire process, and they

Read More

5 Ways Tax Reform Has Impacted The 2018 Housing Market

5 Ways Tax Reform Has Impacted the 2018 Housing MarketStarting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double

Read More