In most of Middle Tennessee, the number of home buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. The Nashville and Murfreesboro TN areas are especially competitive. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Let’s talk about why getting a pre-approval for a mortgage should be the first step when you plan to buy a home.
Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if your dream home is within your reach.
Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”
One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. For example, these recommended local lenders provide my clients excellent rates and service. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”
Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:
- Capacity: Your current and future ability to make your payments
- Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
- Collateral: The home, or type of home, that you would like to purchase
- Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.
Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so.
You might also enjoy:
- The Cost of Renting vs Buying
- Is it too easy to get a mortgage?
- How Accurate is Zillow?
- 8 Practices of Awesome Realtors
Aaron Lovett is a full-service Realtor in Smyrna, TN. His service area includes Smyrna, Murfreesboro, the remainder of Rutherford county and surrounding areas, including Nashville and Davidson county. He cares for the needs of sellers, buyers, and investors. Aaron has lived in the area for over a decade. He takes pride in helping home buyers and sellers reach their real estate goals.
Share this Post