What You Need To Know About Pre-Approvals
One of the most important steps in your homebuying journey is getting pre-approved for a home loan. Understanding this step, and it's importance in the Kansas City real estate market, will help you along your journey to homeownership. Business Insider explains:
“In a pre-approval [sic], the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be.”
To be more specific, a pre-approval gives you critical information about the homebuying process. It helps you understand your options and your purchasing power.
So, how does the pre-approval process work? The first thing a mortgage lender will do is review your finances and credit report. This helps them determine what they are willing to lend you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. With Kansas City's real estate market continuing to be hot in 2023, knowing what you can afford will help the Just Say Home KC Team guide you in your home search. Higher mortgage rates are also impacting affordability, so understanding what your possible rate would be can help you make an informed decision about what you can afford.
Showing You Are Ready for Homeownership
Another reason the Just Say Home Team encourages pre-approval is because it helps a seller feel more confident in your offer. It shows them you're serious about purchasing a home. A recent article from Forbes notes:
“From the seller’s perspective, a pre-approval [sic] letter from a reputable local lender often can make the difference between accepting and rejecting an offer.”
There are still areas of the greater Kansas City arae where we are seeing multiple offers on properties, having a pre-approval letter helps make you bring a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains it may be the most important part of making an offer:
“Pre-approval maximizes the chances you’ll be able to actually close the deal – and sellers want to see that.
The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . .”
As a home buyer, getting pre-approved for a mortgage loan is a crucial beginning step in your journey. It gives you important information about what you can afford, and shows sellers your commitment to purchase. If you have questions about the pre-approval process, contact the Just Say Home KC Team at (816) 656-2816. We want you to have all the tools you need to purchase a home in Kansas City's real estate market.
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