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  • Before you go shopping for that new Indianapolis Area home – Get pre-approved

    Sunday, August 14, 2016   /   by Deborah Argenta

    Before you go shopping for that new Indianapolis Area home – Get pre-approved

    When you want to purchase a home in the Indianapolis Area, your first step should be meeting with a local lender and getting pre-approved for a loan.


    This step is important for 3 reasons:


    1. You'll know what you can spend. Looking at homes you can't purchase not only wastes your time, it's depressing. And, as many home shoppers have learned, once you switch to homes you can afford, none of them will please you.


    2. You'll know if you need to restrict your search to (city) homes that meet certain requirements. VA, FHA, and some regional loan programs have guidelines regarding the homes that will qualify for their financing.


    3. When you have a pre-approval letter in hand, it's more likely that your offer will be accepted, or at least considered over offers without such a letter. Sellers don't want to take their homes off the market in the hope that you'll be able to qualify – they want some solid assurance.


    In fact, if you're shopping for bank-owned homes or short sales here in the Indianapolis Area, it's likely that an offer without a pre-approval letter will be rejected as a matter of routine.


    Don’t mistake a Mortgage Loan Pre-Qualification for a Pre-Approval.


    There is a huge difference between the two. A pre-qualification is done with no verification. As a result, it doesn't mean much.


    You simply talk with the mortgage lender and tell him or her about your situation. You state your income and your expenses, discuss your employment history, and answer a few questions about your credit. Then they tell you if you appear to be qualified, and for how much.


    When you become pre-approved it means the lender has verified your income, assets, down payment availability, and employment. He or she has also checked your credit. So unless you do something to change the picture, you will be able to get a home loan for the amount the lender quotes.


    A pre-qualification doesn't mean a thing, so take the extra step and become pre-approved. 


    If you need to find a good lender, get in touch at dargenta@kw.com.  I'll be happy to provide you with a list of Indianapolis area lenders who have served my clients well.