• The Garcia Team

Getting Pre-Approve For Your Home

Once you have a grasp on your financial situation, and have a rough estimate of what you think you can afford for a monthly mortgage payment, it’s time to get pre-approved. Getting pre-approved before you start searching for your dream home is critical because the pre-approval will determine, based on your credit and income, if you qualify for financing, and for how much. Other benefits include:

• Sellers prefer to work with pre-approved buyers because they have already demonstrated their ability to obtain home financing. This will give your offer on a home an advantage over other buyers.

• In the eyes of a real estate agent, a pre-approval signals that a borrower is well-qualified and serious about purchasing a home. In this way, the agent will go to work to find you the perfect home that suits your family needs.

To get pre-approved, your loan officer will make a thorough investigation into your credit history, credit score, assets, liabilities, income, etc. Try to provide as much information as possible to the loan officer so they can make the best assessment of your financial situation. The loan officer will look at your credit report, and will ask for more information, if needed. Your debt-to-income ratio will be a key factor when determining how much you can borrow. The debt-to-income ratio is the percentage of personal debt you are carrying in relation to how much you earn. Generally speaking, the ideal ratio is 36% and below, anything over this may be seen as riskier. There are various exceptions to this 36% rule, so if you are looking at your monthly income and expenses and have become concerned, speak with our loan officer before taking yourself out of the ring.