Pre-Approval: First Step in Home Buying Process

Buying a Home by Natasha Lingle

 

In many markets across the country,  the amount of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. Washington DC Metropolitan area is not an exception – the market for desirable properties in Vienna VA, McLean VA, Arlington VA, Alexandria VA and Falls Church VA is very competitive, and often, buyers end up in a bidding war.

If you are competing with other buyers, one way to show that you are serious about buying home is to get a pre-approval letter for a mortgage and include it with the offer. In fact, majority of sellers in Northern Virginia, will not take buyers’ offer seriously if the pre-approval letter is not enclosed in the offer package.

But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know 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 agent is that many have relationships with lenders who will be able to help you with this process. But it’s always helpful to do your own research and shop around for the lender who would offer the best rates and competitive fees. Once you have selected a lender, you will need to fill out a loan application and provide 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.

Bottom Line:

Don’t 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. If you are ready to make a move, contact me today to schedule your free no obligation buyer consultation.

To learn more about home buying process, please visit my Real Estate blog page – “Buying A Home”.

Natasha Lingle Realtor in Vienna VA

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Home Buyers’ Guide:

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