In many markets across the country, the number of buyers searching for their dream homesgreatly outnumbersthe 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 Maclays 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 themany advantagesof 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 Macdescribes the ‘4 Cs’ that help determine the amount you will 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 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.
Many potential home buyers overestimate thedown payment and credit scoresneeded 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.
Author:Bree Sweet Phone: 541-743-5535 Dated: April 16th 2018 Views: 219 About Bree: ...
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We keep hearing that home affordability is approaching crisis levels.
"Working with eXp Realty was a pleasure. When we started, we had no idea what we wanted, but our buyer agent helps us figure out the pros and cons of all our options. Our agent went the extra mile willing to put in the extra effort to answer our questions, to make sure we were happy with our decisions, and educated about the market and local area."