Pre-Approval: Your 1st Step in Buying a Home

Dated: June 28 2020

Views: 206

Pre-Approval: Your 1st Step in Buying a Home

Pre-Approval: Your 1st Step in Buying a Home | MyKCM

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 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 through 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 homebuyers overestimate the down payment and credit scores necessary 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

Tj Brar

Originally from Punjab India, in 2010 I made the Best decision to move to Pacific Northwest. Here I live in Lynden with the Mount Baker as my backdrop with my two daughters and a lovely wife. I enjoy ....

Latest Blog Posts

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year.

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This YearIf you’re planning to buy a home this year, saving for a down payment is one of the most important steps in the

Read More

Is Homeownership Still Considered Part of the American Dream!

Is Homeownership Still Considered Part of the American Dream?Since the birth of our nation, homeownership has always been considered a major piece of the American Dream. As Frederick Peters 

Read More

Economy Americans Are Gaining Confidence in the

Americans Are Gaining Confidence in the EconomyThe September Jobs Report issued by the Bureau of Labor Statistics reported that the unemployment rate dropped to 7.9%. Though that

Read More

The Cost of a Home Is Far More Important than the Price!

The Cost of a Home Is Far More Important than the PriceHousing inventory is at an all-time low. There are 39% fewer homes for sale today than at this time last year, and buyer demand

Read More