2024 Homebuying: Why Pre-Approval Wins
Are you looking to buy a home? If Colorado is where you want to live, lining up your pre-approval is something you can’t skip. Let’s break down what it’s all about and why it’s so important right now.
What’s Pre-Approval Anyway?
Before you daydream about backyard BBQs and cozy living rooms, you first have to know your budget. Your lender needs a clear picture of your finances including your income, credit history, and available funds to determine what loan type and loan amount you qualify for. This gives you a pre-approval letter that shows home sellers that you are ready and serious.
As Freddie Mac states:
“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.”
That last part is really important: just because you might qualify to borrow a bunch doesn’t mean you should max it out. It’s all about what is best for your monthly budget and your overall financial plans. Knowing your pre-approval amount helps you zero in on homes that fit your wallet, so when the perfect one shows up, you’re ready to go without second-guessing your finances.
Why Pre-Approval is a Big Deal in 2024
Looking to buy a home in Colorado this year? Some good news: there are more homes for sale than last year, but still not enough to meet everyone’s wish list. Plus with mortgage rates taking a dip from the highs of 2023, more folks are getting back into the house-hunting game. What does this mean? You have to compete with more people for slightly more homes than last year.
In this high-stakes environment, pre-approval transforms from a helpful step to an absolute must. It’s not just about showing sellers you’re serious; it’s about proving you’ve passed the rigorous financial checks that make your offer more reliable.
In a market where multiple offers are the norm, arriving equipped with a pre-approval letter is like holding a winning card—it significantly boosts your chances of securing your dream home amidst fierce competition.
Where Should You Start?
If you’re eyeing the housing market this year, it’s a great time to take your first step toward pre-approval. It not only shows sellers you mean business, but it also gives you a clear idea of what you can afford, making your home search smarter and more focused. Ready to get moving on your home buying adventure? Let’s talk about getting you pre-approved and making your offer stand out. Also, click here to download a free homebuyer’s guide!
