Do I Need a Mortgage Pre Approval?

Pre Approval is the first step to buying a home. And, in this market it is a necessity! Home buyers usually start looking at homes online and always find something they want to look at. When they contact an agent to set up a showing, they are, more often than not, asked if they are pre approved. Why? 

Pre Approval is the First Step

Whether building or buying an existing home, when you shop for a home, you always think about the features and amenities you need in a home. How many bedrooms? bathrooms? Fireplace? Large or small yard? and more... 

However, the very first thing you need to decide is how much you are comfortable spending per month for your mortgage payment. The only way to do this is to get pre approved (NOT prequalified! Big difference.)

Once you decide on your monthly payment, your lender will give you a price range to shop for a home. Now that's smart! Knowing your financial situation and what to expect, you'll be able to look at homes in a range you are willing to pay. 

Nothing is worse than falling in love with a home and then finding out you can't afford it. Heartbreaking. You avoid this when you get pre approved BEFORE you start looking at homes. 

Sellers Want Buyers Who are Pre Approved

In the current Indianapolis Housing Market, sellers expect that buyers who look at their home have a pre approval letter from their lender already. In fact, some sellers require this before you can make a showing appointment. It's proof you can afford to buy their home. 

In a Seller's Market, you can have the edge by being pre approved. Some buyers will skip this step and lose out on their dream home. We don't want that to be you! 

Pre Approval vs Prequalification

A prequalification is issued by some mortgage lenders. You usually fill out income and expense information in an online form and submit it. The lender will pull credit and get prequalified. It's a simple process but not as reliable as getting fully pre-approved. 

A pre approval takes it a couple of steps further. The form you fill out will be similar but they will also ask for copies of W-2's and tax returns to PROVE what your income is. They also ask for bank statements and employer information. This way, when the pre approve you for a mortgage loan, it's because they have verified employment, income and expenses. They now KNOW what you can afford to spend on a home and give you a letter you can enclose with an offer on a new home. 

Wouldn't you rather know for sure you can afford and are comfortable with your mortgage payment BEFORE you fall in love with a home you can't afford? We thought so. It just makes sense. 

We work with lots of lenders in the Indianapolis area and are happy to give you suggestions so you can find the right fit in your lender. Call/Text/Email  the Evelo Team and we can hook you up and then start finding homes for you!