It’s not clear to a lot of folks, why, pre-approval is the first step to buying a home in Tooele County. I know it rarely works like that. Usually the first thing a home buyer does after they realize they want to get a new property is find a website that will show all of the homes for sale in an area and then start scrolling thru hundreds of homes for sale to see if that “perfect” house is on the market.
What follows is a frantic, exciting, daily search of MLS listings looking for what may be the dream home, just waiting for for you to stop by do your walk thru and tell the agent “write it up”.
Just to prove the point click on our Tooele County listing search to see how confusing and time consuming that could be.
That’s the fun way to do it but not the most efficient. And NOT the way it generally works.
In fact it can lead to the discovery of the worst possible outcome. Which is, you loose all enthusiasm for getting a new home and you stop looking. you find that you don’t qualify for the homes you had selected as “property you just had to see”.
Our pals @ Keeping Current Matters sent us a post about that very thing yesterday. It was so good that I would like to share with you so that maybe that terrible disappointment can be avoided and we start looking for a new home the right way; after we have our pre-approval.
Here’s what KCM had to say:
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:
- 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 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.
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