Today I’m here to tell you about why getting pre-approved is so important as well as what lenders will look at when you go to do so.
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In any real estate purchase, pre-approval should be one of the first steps you take.
Here in Wilmington, we’re currently experiencing a trend that is common throughout the country—the number of buyers is outweighing the number of available properties. Getting a pre-approval for a mortgage will give you not only a starting point in terms of what to search for, but it will also show the seller that you’re serious. In fact, most sellers won’t even consider an offer without an attached pre-approval letter.
Pre-approval will make you and your offer stronger from the very start.
So what does a lender look at when you go to get pre-approved? We can break the factors down into Freddie Mac’s four C’s. The first C stands for “capacity,” which denotes a buyer’s ability to pay the monthly mortgage.
Pre-approval will make you and your offer stronger from the very start.
Next are capital or cash reserves. A lender will look at sources from which you can draw money, such as savings accounts or investments, to have a better understanding of how stable your finances are.
Finally, the last C stands for “collateral.” Collateral depends upon the property you’re purchasing, which will also affect the appraisal.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
