Getting a Pre Approved Mortgage Should Always Be Your First Step
When starting the home buying process, some homebuyers research how to get a preapproved mortgage. Getting a pre approved mortgage should always be your first step.
In many markets across the country, the number of homebuyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where homebuyers often need to stand out.
One way to show you're serious homebuyer is to get a pre approved mortgage before starting your home search. Even if you're in a non-competitive market, understanding your budget will let you know if buying a home is attainable.
Freddie Mac lays out the advantages of a pre approved mortgage 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 advantages of working with Bergen County Realtor, Steven Batista, is that I have many relationships with lenders. They will be guide you through the process and help you obtain a pre approved mortgage.
Once you have selected a lender, you will need to fill out their loan application. You'll have to provide your lender credit reports, debt, employment history, down payment and residential history.
Freddie Mac describes 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 mortgage is one of many steps that will show home sellers that you are serious about buying. It often helps speed up the process once your offer has been accepted.
Many potential homebuyers 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.
Source: Keeping Matters Current