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Why Getting Pre-Approved for a Mortgage is Crucial

So, you’ve decided to buy a home in the Albuquerque area. Congratulations! Investing in real estate is always a wise financial decision, and you’ve just chosen a wonderful area to invest in. Plus, buying your own home will bring you indescribably joy and security.

While the overall experience of buying a home is positive, searching for your dream home can be intimidating. You have to set a budget, determine what kind of features you need to have, schedule home tours, hire a realtor… and obtain a mortgage.

The majority of homebuyers use mortgages to purchase their home. There are different kinds of mortgages depending on your income and financial situation, but here’s the rundown.

A mortgage, quite simply, is a loan for the amount of money your home is worth. The amount of your loan depends on your credit report, annual income, and a whole host of other factors.

If you’re searching for a home in an area as competitive as Albuquerque, getting pre-approved for your mortgage is essential to buying the home of your dreams. Here’s why.

It Gives You a Competitive Edge

internet researchIf you’re pre-approved for a mortgage when you make an initial offer on a home, it lets the seller know that you’re serious. In competitive markets like Albuquerque, sellers often prefer pre-approved buyers.

Essentially, you’re given priority over other buyers. This means you’re more likely to buy the best home for you in a timely fashion.

It Helps Set Your Budget

Going through the pre-approval process with a lender is the ideal way to set your budget, because you’ll know firsthand how big of a loan you can get. To become pre-approved, you’ll sit down with a lending officer who will review your credit score, amount of debt, income level, and all other factors of your financial life.

Basically, the lender is reviewing your finances to determine if you can afford to buy the home. This includes monthly mortgage payments, which will vary depending on interest rates, as well as the big down payment.

Be Smart With Your Money

mortgage interest rateHowever, there are other things you should look atwhen deciding your budget. Take a hard look at your annual income, as well as your expenses. Try to determine how much money you’re comfortable spending per month on a mortgage payment. Our mortgage calculator can help with that.

You should also think about that down payment. Depending on what kind of mortgage you qualify for, which determine the down payment, you could be paying around 20% of your home’s value upfront.

When you sit down with a lender to become pre-approved, they can help you figure out what kind of mortgage is best for you.

Any Other Questions about Buying a Home?

Please reach out to us! We would love to sit down and talk with you about your mortgage pre-approval options, and your goals in real estate. Feel free to use any of our complimentary home-search tools and real estate resources.

If you ever have any questions about the home buying process, please don’t hesitate to contact us. We would love to help.