Before you start your search for Denver residential real estate investments or a home for yourself, it’s important to know exactly how much you can spend. There are really two figures you calculate: How much the bank will lend, and how much you can realistically afford. These two figures are seldom the same, and the lender may well offer you a figure that is higher than what you had in mind to spend. Don’t be tempted—that’s just an outside figure, you don’t have to spend it all.
Pre-qualifying does not necessarily give you a guarantee; it is only meant as a way for lenders to quickly say, “here’s what we think we can lend you.” It’s not a done deal yet. Pre-qualifying may range from entering in a few simple numbers on a Web form, to doing a full credit check. Usually though, the pre-qualifying phase does not offer a solid guarantee that you will get the loan, it is only meant to be an estimate of what you can get. Pre-approval, on the other hand, offers more reassurance and a guarantee that you qualify for a certain amount of money. Don’t stretch yourself too thin, though—you may actually qualify for more than you can realistically afford, so the first thing you need to do is to create a budget and stick to it.
Pre-qualification (or pre-approval) will give you a greater amount of leverage when you are negotiating with a seller, since the seller is reassured that you are able to follow through with your offer; in fact, almost all sellers and Realtors only take offers from pre-qualified buyers. Come into our office today and talk to one of our financial specialists to see how you can pre-qualify for your Denver investments!
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