Bloomington/Normal....Pre-Approval Matters

Your family is growing. Toys are everywhere. Space is tight. You decide that it's time to upgrade into a home that better suits your family's needs. You know what your current home payment is and have a rough idea of how much the insurance will be. So you scour Zillow and other home sites for a home that you feel will fit your needs and MIGHT fit your budget.

When it comes to a financial decision as important and impactful as home ownership, doesn't it sounds nuts that you are shopping for something that is potentially the largest purchase you will make in your lifetime WITHOUT KNOWING how much you can afford? Yet time after time, buyers begin by "just shopping", or "getting a feel for the market".

In my experience, there is little in the home buying process more painful than working with a potential buyer who feels they have found their next home, but can't make an offer. Getting pre-approved and knowing how much you can or cannot afford BEFORE contacting a real estate agent is the first step that any potential homeowner should take. Not only does it give you a realistic understanding of where you should set your sights, but it also makes you a more competitive buyer and reduces the likelihood of major disappointment.

There are a few things that you need to do to become pre-approved.

CHECK YOUR CURRENT CREDIT SCORE AND HISTORY

All too often I see potential buyers fall in love with their dream home and not be able to obtain a mortgage to purchase it due to his/her credit score. If you have negative marks on your credit report, take the necessary steps to rectify and remove them.

First, check your credit score and history. If you have collections and other negative items showing, take the necessary steps to rectify and remove them from your credit report. This will save you a lot of time and energy down the road.

FINANCIAL CONFIRMATIONS

Without a doubt, you can bank (See what I did there?) on your mortgage lender needing verification of your income, credit history and proof of your assets. This goes to show how much of a home you can afford, your payment history, and what relative liquid assets you hold.

CONTACT A PROFESSIONAL

There are many great mortgage lenders in the real estate world. He or she will become one of your best friends along your journey to home ownership. They will become intimately aware of your income, expenses and financial goals. If you don't know where to start, contact a trusted real estate advisor for a minimum of three of their recommendations. The choice of who you use is always yours!

At the end of the day, shopping for your next home is no different than buying a TV (With a few exceptions). You will determine if you can afford it, how much you can afford, and which one to purchase. The one that ends up fitting your likes, wants, needs and budget usually wins!