Stop Wondering What Your Budget Is & Get Pre-Approved!

In many markets across the country, the number of buyers searching for their dream homes 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 that 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 not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.  It also gives you the power to put in an offer when you do find that perfect home. (After all, no reasonable seller would accept an offer from a buyer who doesn't have financing in place.)

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 to working with Alltown Real Estate is that we have relationships with lenders throughout the state who will be able to help you through this process. Once you have connected with a trusted 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.”

Mortgage Loan Company 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 homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

If you're confident you qualify, but still haven't gotten pre-qualified, DON'T wait until after you've found the perfect home to sit down with a lender.  In the current market, chances are that home will be sold before you even have the chance!

Ready to take the next step twoard becoming a home owner?!  Let's chat!  Call or message us today to get started!