The Power of Pre-Approval

The Power of Pre-Approval

If you’re buying a home this spring, today’s housing market can feel like a challenge. With so few homes on the market right now, plus higher mortgage rates, it’s essential to have a firm grasp on your homebuying budget. You’ll also need a sense of determination to find the right house and act quickly when you go to put in an offer. One thing you can do to help you prepare is to get pre-approved.

To understand why it’s such an important step, you need to know what pre-approval is. As part of the process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand 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.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow so you have a stronger grasp of your options. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

That’s not the only thing pre-approval can do. Another added benefit is it can help a seller feel more confident in your offer because it shows you’re serious about buying their house. And, with sellers seeing a slight increase in the number of offers again this spring, making a strong offer when you find the perfect house is key.

As a recent article from the Wall Street Journal (WSJ) says:

If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. It lets you know what you can borrow for your loan and shows sellers you’re serious. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.


Recent Blog Posts

What’s Next for Home Prices and Mortgage Rates?

If you’re thinking of making a move this year, there are two housing market factors that are probably on your mind: home prices and mortgage rates. You’re wondering wh… Read more

9 Must-Have Traits in a Real Estate Agent to Sell Your Home Fast and For Top Dollar

Selling your home is a significant milestone that requires careful planning and decision-making. One of the most crucial choices you’ll make is selecting the right rea… Read more

What More Listings Mean When You Sell Your House

The number of homes for sale is playing a big role in today’s housing market. And, if you’re considering whether or not to list your house, today’s limited supply is o… Read more

All the Single Ladies

In today’s housing market, more and more single women are becoming homeowners. According to data from the National Association of Realtors (NAR), 19% of all homebuyers… Read more

Does It Make Sense To Buy a Home Right Now?

Thinking about buying a home? If so, you’re probably wondering: should I buy now or wait? Nobody can make that decision for you, but here’s some information that can h… Read more

Some Experts Say Mortgage Rates May Fall Below 6% Later This Year

There’s a lot of confusion in the market about what’s happening with day-to-day movement in mortgage rates right now, but here’s what you really need to know: compared… Read more

How to Succeed in a Bidding War

In today's competitive real estate market, facing multiple offers has become increasingly common, especially in sought-after neighborhoods. As a homebuyer, navigating … Read more

Are More Homeowners Selling as Mortgage Rates Come Down?

If you’re looking to buy a home, the recent downward trend in mortgage rates is good news because it helps with affordability. But there’s another way this benefits yo… Read more

Key Questions to Ask About Schools and School Districts

When searching for a new home, many factors come into play, and one of the most crucial considerations for families is the quality of local schools and the school dist… Read more

Hey, before you go!

Want to stay one step ahead of the market? Sign up to be on Dyanna's VIP mailing list to receive exclusive listings, real estate news and a lot more.