Many buyers who have not been given guidance in the current home buying process believe that the first step is getting online to search internet sites or going out with a Knoxville real estate agent to view Knoxville homes for sale.  If this is the first thing you are doing then you are skipping the most important step. Unlike the past when a buyer with marginal credit could typically qualify for a larger mortgage payment, today’s stringent lending guidelines have completely changed. Unless you have excellent credit and a solid income history, you cannot even guarantee that you will be approved. For those who are approved, there are parameters that can effect your interest rate, as well as the amount of loan for which you qualify. For the most productive experience in buying a Knoxville home there is a specific process that should and ultimately will take place, but straying outside the order of these steps can ultimately cost you time, money, and heartache.
First and foremost a buyer should speak with one or more lenders to get a pre-approval.  You may ask yourself, why is this more important than looking at homes right away.  It is because this step is the one that all of the others hinge on. It tells the buyer how much home they can afford and the price range in which they and their Knoxville real estate agent should be looking. Buyers who fail to follow this first step, may end up looking in a price range that they cannot afford, and ultimately be let down. By viewing homes they cannot afford, they will then have to lower their expectations.  This makes it more difficult to find a home they will like, because they have been exposed to homes with amenities and features above their price range.
Another important point to be made is the difference between a pre-qualification and a pre-approval. A pre-qualification looks only at a buyers credit history and income, and does not guaranty a loan. On the other hand, a pre-approval both looks at AND VERIFIES a buyer’s credit, income, and debt and provides a loan approval within a specific dollar amount with certain conditions and terms. Becoming pre-approved means you can comfortably search for your dream home, knowing exactly how much you can afford.