What Should I do First?

By
Real Estate Agent with Keller Williams Realty - Topsfield, MA 92593

This is a question that many first-time buyers have when they begin their search for a home. It's also what ANY buyer should do no matter how many times they've purchased a home.

In our area, seller agents expect a prequalification or preapproval letter, from the lender, to be attached to our Contract to Purchase (offer). Many times a seller will not consider an offer if the buyer does not present a  prequalification or a preapproval letter with their offer. 

There is a difference between the two (2). The prequalification letter simply states a buyer is qualified for a mortgage of up to X amount of dollars, while the preapproval letter indicates the buyer has been approved for a mortgage of X dollars.

Below is another great information piece from KCM to share with our buyer clients

 

Getting Pre-Approved Should Always Be Your First Step

Getting Pre-Approved Should Always Be Your First Step

In many markets across the country, the number of buyers searching for their dream homes greatly 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 with 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 home buyers 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.

 

 

Posted by

I pray that God our Father and the Lord Jesus Christ will be kind to you and bless you with peace

2 Thessalonians 1:2

 

Doug Dawes REALTOR®

Broker Associate

KELLER WILLIAMS REALTY 

49 Main Street
Topsfield, MA 01983
 978-887-3995  ~ Office
 978-270-3037  ~ Cell
 DougDawes@KW.com

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Mortgage / Finance
Location:
Massachusetts
Groups:
FOR SALE BY OWNER - MARKETING(FSBO)
Boston Real Estate
New Hampshire - Real Estate and Life in The Granite State!
MA REALTORS
Boston Area Real Estate
Tags:
financing
preapproved
prequalified

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
2,930,472
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Doug. This is a terrific explanation and very very important.

Apr 17, 2018 08:19 AM #1
Rainmaker
570,056
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I'm always surprised when a buyer doesn't know their first step, after hiring me, is to get prequalified for a mortgage Sheila Anderson 

Apr 17, 2018 01:41 PM #2
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
570,056

Doug Dawes

Your Personal Realtor®
Are You Looking?
*
*
*
*
Spam prevention

Additional Information