At S&D Real Estate, we understand that buying a home is an exciting journey—but it can also feel overwhelming. There’s one essential step in the process that can make all the difference: pre-approval. Here’s what it is, why it matters, and how it can give you the competitive edge you need.

What Is Pre-Approval?

Pre-approval is like getting the green light from a lender. It tells you how much you can borrow for a home and gives you the confidence to make informed decisions during your home search.

To determine your borrowing capacity, lenders evaluate your financial history. According to Realtor.com, you may need to provide documents such as:

• W-2s from the last two years

• Tax returns from the last two years

• Pay stubs from the last 30 days

• Bank statements from the last 60 days

• Investment account statements (if applicable)

• Two years of your residential history

Once your lender has reviewed these, you’ll receive a pre-approval letter showing the maximum amount you can borrow. This letter not only helps guide your search but also strengthens your position as a serious buyer.

Keep in mind, changes in your financial situation can impact your pre-approval status. To avoid issues, it’s important to hold off on major financial moves like switching jobs, applying for new credit, or withdrawing large sums of money after receiving your pre-approval letter.

How It Helps You Determine Your Borrowing Power

In today’s market, where home prices are rising and mortgage rates are fluctuating, knowing your budget is more important than ever. Pre-approval helps you:

• Understand how changing mortgage rates impact your monthly payments

• Determine the maximum loan amount you qualify for

• Set realistic expectations for your home search

Armed with this information, you can tailor your search to homes that fit comfortably within your financial plan, avoiding the disappointment of falling in love with a property outside your budget.

As Dee McDonough, owner of S&D Real Estate, puts it: "Pre-approval isn’t just about numbers—it’s about empowering customers with the confidence to take the next step in their journey. Knowing your borrowing power upfront makes all the difference in today’s fast-moving market."

How It Helps You Stand Out

When you’re ready to make an offer, pre-approval gives you a significant advantage. Sellers are more likely to take your offer seriously because it shows you’ve already undergone a thorough financial review.

As Greg McBride, Chief Financial Analyst at Bankrate, explains:

"Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns, and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount."

In competitive markets, this level of preparation can make your offer stand out from others, especially when multiple buyers are vying for the same property.

If you’re planning to buy a home, pre-approval should be one of the first steps on your checklist. It helps you understand your borrowing power, aligns your search with your budget, and positions you as a serious buyer in the eyes of sellers.

Let our team at S&D Real Estate guide you every step of the way. We can also connect you with a trusted lender to make your home-buying journey seamless. Contact us at (863) 824-7169 or email agentcare@sanddrealestate.com to get started today!