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KCRE’s Buyer’s Guide for How To Prepare for This Housing Market | Part II.

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Part II. Get Preapproved for a Loan 

Ok, so you’ve created your Dream Home “Wish-List”. Now what?

In our Buyer’s Guide for how to best prepare for this unpredictable market, our next recommendation is a crucial step in making your Dream Home a reality: getting preapproved for a loan. Your purchase is truly dependent upon what you can afford and just how far your money can go, which is why it’s critical not only to get pre-approved, but to find the best lender with the best programs for you and your situation. 

The Pre-Approval Process

First of all, what does it mean to get pre-approved?

A mortgage pre-approval is a letter from a lender which indicates the type and amount of loan you are able to qualify for. This is done after your lender has taken a look at your financial history, which includes evaluating your credit report, tax returns, paycheck stubs, and assets.

Why is this necessary? With a pre-approval, you are able to better determine which homes are within your means, and you’ll be prepared to act swiftly on an offer if the opportunity presents itself. Furthermore, you will have the freedom to shop for these homes – showing that you are a serious, well-prepared buyer worthy of the Seller’s consideration. 

When is the best time to get preapproved?

The best time is before you start home shopping because in this market it is serious buyers only. The sooner you get pre-approved, the easier it will be to move on a home you are interested in before it’s too late. And it may give you an edge over other interested buyers who are not yet pre-approved. 

But furthermore, as one of our Sales Associates, Jonathan Payne notes, “When you are competing with many other offers, you are trying to do everything in your power to stand out. Price is obviously at the top of the pyramid, but right under that are terms and your loan (if you are not lucky enough to be paying all cash). Here in the East Bay, all the premium homes are going to have reports and disclosures up front, so removing the inspection contingency is expected. Having the right lender all set up so you can remove all contingencies is the next step.” 

Why Your Lender Matters 

To get to that step, you need to work with a lender that understands our specific market, and how to provide top notch service within it. Sellers and their agents like to see Buyers working with local agents that are known providers with good customer service, and reputation of performing in a timely manner. 

Indeed, “Many folks are tempted to just reach out to the bank they work with now, or maybe a financial institution they are invested in. If you have connections that can get you to the premiere service folks in the mortgage division, that can work. If not, you are putting too much at risk.” 

Do you need help finding a local lender you can trust? We can help you there. 

Through the Pre-Approval Process and Beyond 

Get advice on some of the local, trusted lenders that can get you pre-approved and take you all the way through to underwriting before you make an offer. Why is finding a local lender so important? When multiple offers are being evaluated, if price and terms are all equal, the next point of evaluation is your lender. Jonathan states, “This is where the listing agent comes into play. If they know the lender and can trust them, that will be the recommendation to the seller.” 

 If you haven’t talked to your agent about this, have that be the next conversation. We would be happy to guide you in the right direction to make the home-buying process as smooth as possible. 

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