KC Buyers: Beginning with Pre-Approval
Are you looking to buy a home this fall? If so, there are a few things you should know. With today’s mortgage rates and rising home prices, affordability is tight. At the same time, a limited number of homes on the current Kansas City housing market has created some competition among buyers. Despite this, there are ways to navigate these waters if you’re strategic. The first factor that will work to your advantage is getting pre-approved for a mortgage. This step will help you understand your financial situation and set you up for success from the beginning of your home search.
What Pre-Approval Does for You
Why is pre-approval such an important step? Let’s take a look at what pre-approval is. During the homebuying process, a lender will look at your finances to determine how much of a loan you can receive. From there, your lender will give you a pre-approval letter to help you know how much money you can borrow. Freddie Mac explains it like this:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”
Pre-approval gives you critical information to help you understand how much you can borrow. Why does this help you, especially in the current housing market? Higher mortgage rates and home prices are impacting affordability for numerous buyers. Therefore, a concrete understanding of these numbers is even more vital to wrap your head around your choices.
Pre-Approval Helps Show Sellers You’re a Serious Buyer
The truth of the current market is that more buyers are looking to buy than homes are available for sale. This imbalance is creating some competition among homebuyers. What does this mean for you? As you continue your search, you could find yourself in a multiple-offer scenario when you make an offer on a home. One way to stand out from other hopeful buyers is by getting pre-approved for a mortgage. As an article from the Wall Street Journal (WSJ) says:
“If you plan to use a mortgage for your home purchase, pre-approval should be among the first steps in your search process. Not only can getting pre-approved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”
Pre-approval indicates to the seller that you’re a serious buyer who’s already undergone a credit and financial check. This will make the sale more likely to move forward without unexpected delays or financial issues.
When buying a home, getting pre-approved is an essential first step that will give you an advantage within the current competitive housing market. The more prepared you are, the better your chance of getting your preferred choice. The Just Say Home real estate experts are ready to help you navigate this step and find your dream home!