One of the 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 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.
Did you know?
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 as well.
Did you also know?
Even if you aren’t quite where you need to be, DON’T GIVE UP!!! Many lenders are willing to work with you to create a plan to increase credit scores and make the dream of home ownership a reality!