An important ingredient in a successful home search is knowing how much you can afford. You don’t want to fall in love with a property only to find out it’s outside your price range.
That’s why we highly recommend getting a Home Loan Pre-Approval. This is a document from your bank, credit union or other lender stating how much of a home loan they are willing to give you. There are two advantages to getting this pre-approval:
- It gives you the peace-of-mind of knowing you can afford homes you view on the market, and won’t have problems arranging financing.
- It’s a sign to sellers that you are a serious, prepared buyer – which gives you the edge when making an offer.
You can arrange for a Home Loan Pre-Approval with your bank, credit union or other lender, or by working with a good mortgage broker.
Banks, credit unions and other lenders use specific criteria to determine how much of a home loan they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home. It may seem like a scary process, but it is actually straightforward. You can usually get a Home Loan Pre-Approval in a day. You’ll be glad that you did.
By knowing what you can afford, you can confidently shop within that price range. For example, if you qualify for a $300,000 home loan, and you have another $50,000 available as a down payment, you can look for homes in the $350,000 range. Or, if you qualify for a $350,000 home loan, and you have very little or even nothing available as a down payment, you may still be able look for homes in the $350,000 range. However, you may need to be a military veteran, or qualify for down-payment assistance in this scenario.
Have questions about arranging financing? Please submit the form below and we’ll contact you.