What should buyers do to determine the maximum mortgage they can afford?

• A. Sign contracts before checking finances
• B. Rely on the seller's loan
• C. Not necessary to pre-approve
• D. get pre-approved for needed financing, whereby the bank or mortgage company will determine the maximum amount of mortgage the buyer can afford by reviewing the buyer's current financial position.

Answer: (D)

The main idea is to establish a realistic borrowing limit before and during the home search. Getting pre-approved means a bank or mortgage company examines your finances—income, assets, debts, credit history, and down payment—to determine the maximum loan amount you could be approved for. This gives you a clear budget to shop within and strengthens your position when making an offer, since lenders have already vetted your financing. Relying on a seller’s loan, signing contracts before your finances are checked, or thinking pre-approval isn’t necessary can lead to surprises, failed deals, or overextending yourself. So, the best next step is to get pre-approved, letting the lender map out the maximum affordable mortgage based on your current financial position.