Why Getting PreApproved Should Be Your First Step

Dated: 03/23/2018

Views: 2

Why Getting Pre-Approved Should 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, 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.

Blog author image

Mike Stearns CalBRE 01305251

Mike's Real Estate Team Trust, Integrity, Friendship Broker: DRE# 01878277 Agent: DRE# 01305251....

Latest Blog Posts

Why Have Interest Rates Jumped To A 7Year High

Interest rates for a 30-year fixed rate mortgage have climbed from 3.95% in the first week of January up to 4.61% last week, which marks a 7-year high according to Freddie Mac. The

Read More

How Current Interest Rates Can Have A High Impact On Your Purchasing Power

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.61%, which is still near record lows in

Read More

Dont Wait To Sell Your House Buyers Are Out Now

Recently released data from the National Association of Realtors (NAR) suggests that now is a great time to sell your home. The concept of ‘supply & demand’ reveals that the best

Read More

Is Your First Home Within Your Grasp Now

Some Highlights: According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds. According to NAR’s latest Profile of Home Buyers & Sellers, the

Read More