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homebuyers: pre-approved loan

L

LordSnailz

Diamond Member
First time homebuyer here ... so my questions would really stupid ...

-Does is matter where I get my pre-approved letter, any suggestions? My plan was to get a pre-approve letter to find out how much I can afford and then I can go ahead and look for a RE agent.
-Is there a good forum for homebuyers, I had other questions, like where to find a good RE agent etc.

Any help is appreciated! TIA!
 
I bought my first home in November 2000. Let me help you out in this.

First, you should budget what you can afford. It is a good idea to purchase a house on what you can afford instead of what both you and your wife can afford. Bad things happen, and you don't want to be in a crunch for money if one of you gets laid off or your wife has a baby for instance.

Second, find out how much you can get. Talk to a mortgage place and they will set you up. This all depends on your credit history on how good a rate and how much you can get. My wife and I approved for over $350,000, but we only needed half that. As I said in the first section, it is a good idea to not mortgage yourself to the hilt.

Third, go find a house. My wife and I never had to talk to a relator actually until we were ready to buy. We found a new house and wanted it. We put a down payment on it and bingo it was ours. If you are looking getting some help, then a relator can give you books on houses that are available and point you in the right direction.
 
You don't technically need a letter. Just letting them know that you are pre-approved will normally be sufficient. And you can get an approval through a bank or broker, you usually just need to pay an application fee and wait 24-48 hours.
 
Thanks for the replies -

I understand the notion that we should not try to get something beyond our limits just in case, but houses out here are insane ... 500K, so I need my gf's help we are to get anything ... =(
And the other reason I wanted to get pre-approved was to get an idea on what we can afford and still be okay if anything major happens ...

So it doesn't matter where we get pre-approved then right? Also, any good homebuyer's forum? Only thing I could think of was fool.com but that you need to pay.
 
a couple more suggestions.

Don't let the seller know how much you are pre-approved for. Instead, ask your bank to write a letter that says you are pre-approved for the amount that you decide to offer.

Also, make sure that you still put a financing contingency into your offer to buy, just in case some snafu happens....like you both lose your jobs in between the offer and closing.....

you can go talk to your bank about getting pre-qualified... this will give you an idea of what you can borrow. Pre-approved is the next step, where the bank says in writing, that they will lend you $XXX,XXX.
 
I was in the same boat and am still in that boat 😀. Put down 10K deposit on a new Condo which won't be ready for move in until Dec of this year or Feb. of next year 🙁. Can't lock in on the rates as I'll have to fork over 1% of the loan to get a 6 month lock. I'm working with 2 loan officer to see which would be better for me. hopefull everything turns out ok. 🙁


--Scsi
 
A finance contingency is standard in any escrow contract, which your realtor will have you sign, once you choose your house and come to terms.

As far as sites, a lot of online mortgage sites have good info. Also try bankrate.com .
 
Originally posted by: CPA
A finance contingency is standard in any escrow contract, which your realtor will have you sign, once you choose your house and come to terms.

As far as sites, a lot of online mortgage sites have good info. Also try bankrate.com .
Click to expand...

Yes, it should be standard. BUT some people, equate a "pre-approval letter" with financing, so an inexperienced realator might simple ignore that part of the offer IF the buyer has a pre-approval letter. My point was that LordSnailz should confirm that his offer to buy still has a financing contingency in it.
 
Originally posted by: yamahaXS
a couple more suggestions.

Don't let the seller know how much you are pre-approved for. Instead, ask your bank to write a letter that says you are pre-approved for the amount that you decide to offer.

Also, make sure that you still put a financing contingency into your offer to buy, just in case some snafu happens....like you both lose your jobs in between the offer and closing.....
Click to expand...

What is the financial contingency for?
 
My advice is hurry. Rates have been going up the last month to two months.

Also, when you speak to a Loan Officer or the bank, you can get a good faith estimate to break things down. That would show you the monthly payment on different priced houses at current rates.

I closed on my house on July 31st. Lots of work ahead of you.
 
Originally posted by: dquan97

What is the financial contingency for?
Click to expand...

It says you're not legally committed to buying the house if you can't get a mortgage. Unless you've got a lot of assets that you can use to purchase the house, this is a no-brainer inclusion. Unless you don't feel particularly attached to your earnest money.
 
Originally posted by: dquan97
Originally posted by: yamahaXS
a couple more suggestions.

Don't let the seller know how much you are pre-approved for. Instead, ask your bank to write a letter that says you are pre-approved for the amount that you decide to offer.

Also, make sure that you still put a financing contingency into your offer to buy, just in case some snafu happens....like you both lose your jobs in between the offer and closing.....
Click to expand...

What is the financial contingency for?
Click to expand...

Just in case you don't get the money from the bank you can still get your earnest money back. When I bought last summer, we specified that we needed financing from a particular first time home buyers program because I knew that if we didn't get a loan through that program, I didn't want to buy the house we were making an offer on.
 
Originally posted by: yamahaXS
Originally posted by: dquan97
Originally posted by: yamahaXS
a couple more suggestions.

Don't let the seller know how much you are pre-approved for. Instead, ask your bank to write a letter that says you are pre-approved for the amount that you decide to offer.

Also, make sure that you still put a financing contingency into your offer to buy, just in case some snafu happens....like you both lose your jobs in between the offer and closing.....
Click to expand...

What is the financial contingency for?
Click to expand...

Just in case you don't get the money from the bank you can still get your earnest money back. When I bought last summer, we specified that we needed financing from a particular first time home buyers program because I knew that if we didn't get a loan through that program, I didn't want to buy the house we were making an offer on.
Click to expand...

If the buyer did back out of the deal because they couldn't get a mortgage, what is the sunk cost that the buyer had to pay nevertheless?
 
thanks for the suggestions, I'll look into the 'financial contingency', I did not know about that ...
I'm know interest rates are going up quickly (I guess I missed the boat on this one) but I didnt' want to rush into such a huge purchase.

Going to setup an appointment with Washington Mutual tomo. to get a pre-qualified letter. Shoot out any other suggestions or caveats ... seems like I'm not the only first time homebuyer here =) thanks as always ...
 
Originally posted by: dquan97
Originally posted by: yamahaXS
Originally posted by: dquan97
Originally posted by: yamahaXS
a couple more suggestions.

Don't let the seller know how much you are pre-approved for. Instead, ask your bank to write a letter that says you are pre-approved for the amount that you decide to offer.

Also, make sure that you still put a financing contingency into your offer to buy, just in case some snafu happens....like you both lose your jobs in between the offer and closing.....
Click to expand...

What is the financial contingency for?
Click to expand...

Just in case you don't get the money from the bank you can still get your earnest money back. When I bought last summer, we specified that we needed financing from a particular first time home buyers program because I knew that if we didn't get a loan through that program, I didn't want to buy the house we were making an offer on.
Click to expand...

If the buyer did back out of the deal because they couldn't get a mortgage, what is the sunk cost that the buyer had to pay nevertheless?
Click to expand...

the amount of earnest money that a buyer puts up is variable. Some areas, tradition is $1000. Others, its the downpayment (aka 20-40k). We put up 3% ($5k) on our house.
 
Remember that you have choices on who you get your money from. After seeing WaMu tomorrow and getting pre-approved, don't stop there. When you find something you are going to get, check around to other banks or mortgage lenders. These guys are salesman and get paid to sell loans. They are making money off you so the rates are negotiable. You can shop around for rates and points and fees. You can save lots of money from one guy to the next, or vice versa.

WaMu is a big bank with lots to offer, but they by no means have the best rates out there on a daily basis. By that I mean there are competitors that can beat them some days and loose to them somedays. Check with another bank or mortgage lender to see what they can offer outside of WaMu programs.
 
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