American Dream Realty - where dream homes come true!!
Pam Clamp or Fran Smith

American Dream Realty – where dream homes come true!!
Come meet the dream team .. Pam Clamp, Fran Smith and Sami Hashash


Buying your first home is likely the biggest financial decision you’ll ever make, and so you should educate yourself as deeply as possible before you take that momentous step. Here’s how to get started.
First, let’s take a look at your financial situation: How much home can you afford? Which really means, how much money can you borrow? Which also really means, how much do you make and what do you already owe? The general rule of thumb is that you can get a mortgage only if your debt-to-income ratio is 40%* or better. That means, if your household income is, say, $100,000 a year, you’d better not owe more than $40,000 to credit cards, student loans, car loans, or other debts.
Next, plan for the house you can afford today, not five years from now, when you’ve sold your screenplay or IPO’d your tech startup. What kind of house might that be? Well, we have this handy affordability calculator to help you figure that out.
Once you have a rough idea of what you can afford, you’ll want to get a mortgage pre-qualification or pre-approval letter. A pre-qualification is a lender’s basic overview of your ability to get a loan. You provide all the information to a lender, no backup paperwork necessary. You can do this online, on the phone, or in person—whichever makes you more comfortable. A pre-approval is more in-depth. It’s the document that will prove you are a serious buyer. But it also means getting your ducks in a row to prove your financial worth to a lender. The lender will look at your bank statements, tax returns, credit score, and other financial information, while also checking to see if you qualify for any special programs such as government-backed FHA loans or VA home loans. While neither a pre-approval nor a pre-qualification guarantees you’ll get a loan, they’re much more reliable indicators of your ability to buy a home. What do you do with that letter? Include it when you’re submitting a bid on a home—it’ll make the offer that much stronger.
If you can’t get pre-approved or pre-qualified for the loan (and home) you want, don’t give up. Instead, look seriously at how much you’re hoping to spend, when you’re planning to buy, and how you can budget to put yourself in a stronger financial position.
Regardless of whether you get pre-approved or pre-qualified, it’s worth speaking with a REALTOR® or other real estate professional to navigate these processes properly. You’re at the beginning of a long, complicated, and ultimately rewarding journey—let’s do things right!
What’s your price range? Let’s find out. Discover what you can afford and the difference between prequalifying and pre-approval.