Be Smart – Get Pre-Approved for a Loan
In the Denver metro real estate market, the amount of buyers greatly outnumbers the amount of homes for sale. This has led to a very competitive market where buyers often need to stand out among multiple offers.
One way to show sellers you are serious about buying is to get pre-qualified or pre-approved for a mortgage before starting your search. And, knowing your budget will give you the confidence to know if your dream home is within your reach.
According to Freddie Mac:
“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.”
Once you have selected a lender, you need to fill out their loan application and provide them with important information regarding income, work history, asset information, down payment ability and information so the lender can pull your credit report.
Freddie Mac describes The 4 C’s that help determine your borrowing ability:
- Capacity: Your current and future ability to make your payments
- Capital or cash reserves: The money, savings and investments you have that are easily available to liquidate
- Collateral: The home, or type of home, you would like to purchase
- Credit: Your history of on-time debt repayment
Getting pre-approved is one of many steps that shows sellers you are qualified to purchase their home. A pre-approval letter is a “must have” to submit along with an offer!
Real Estate Bottom Line
Many potential home buyers think they need a large down payment or need super high credit scores to qualify for a loan. Talk to a lender – you may be pleasantly surprised at the loan options available to you.
Leave a Reply