One Homebuying Step You Don’t Want To Skip: Pre-Approval

Buying Chicago homes can be an exciting journey, but one crucial step can make all the difference: pre-approval. Here’s why this essential process is key to your homebuying success and how MPG can help.

What Is Pre-Approval?

Pre-approval is like a financial green light from a lender, letting you know how much you’re eligible to borrow for a home. To determine this, lenders review your financial history. Common documents they’ll request include:

• 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 rental or residential history

Once complete, you’ll receive a pre-approval letter outlining your borrowing capacity. It’s important to maintain financial stability after pre-approval—avoid changing jobs, applying for new credit, or making large withdrawals, as these can affect your status.

How It Helps You Determine Your Borrowing Power

Navigating today’s market requires a clear understanding of your budget. With Chicago home prices on the rise and fluctuating mortgage rates, pre-approval provides valuable insights into your loan options and future monthly payments.

By knowing the maximum amount you can borrow, you can confidently tailor your home search within a budget you’re comfortable with, ensuring you focus on properties that align with your financial goals.

How It Helps You Stand Out

Pre-approval doesn’t just benefit buyers—it also makes a strong impression on sellers. A pre-approval letter demonstrates that you’re a serious buyer who has already cleared key financial checks.

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.”

This extra step can give you an edge in competitive real estate markets, making your offer more appealing and increasing the likelihood of closing the deal.

Bottom Line

Pre-approval is a vital first step in the homebuying process. It provides clarity on your budget, strengthens your offers, and sets you up for success. Our team of real estate professionals are here to guide you every step of the way. Whether you're looking to buy your dream home in Chicago or need advice. Connect with us---we're happy to help make your real estate journey smooth and rewarding.