Importance of Loan Pre-Approval….especially in 2017

In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. 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. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets, such as Portland’s. 

One of the many advantages of working with a local real estate professional is that we have relationships with lenders who will be able to help you with this process. 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:

1. Capacity: Your current and future ability to make your payments
2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
3. Collateral: The home, or type of home, that you would like to purchase
4. 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.

NEW IN 2017 – New language in the Residential Real Estate Sale Agreement requires notice of intent to proceed with the loan transaction within 3-10 days (as specified by buyer when writing an offer) and buyer’s agent must formally notify the seller.  This new timeline makes it crucial that you understand this is no time to jump ship and decide to try a new lender.  There is a short window in which to revise your loan and renegotiate your position with the seller, but the seller is not obligated to agree, and you may find your transaction terminated. 

BOTTOM LINE –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 as well.  And once you’ve written an offer, it may be too late to revise your strategy on lenders and loan programs.  So take this process seriously and weigh your options carefully.

Cary Perkins, Windermere Top Producer

FINE PORTLAND LIVING

Current Portland Oregon Real Estate Information,

Highlights of Portland Oregon, House Ideas

Portland Oregon Homes

by Cary Perkins

Portland Real Estate, Portland Oregon Top Producer, Windermere Top Producer, Portland Realtor, Portland Homes for Sale

Windermere Top Producer Cary Perkin