Buying a house ...

aggieAXO · #1 04-24-2008, 09:18 PM

I am just curious as to why pre-approval status does not make a difference? When I sold my house my realtor only considered offers from those that were pre-approved.

JennRN · #2 04-24-2008, 10:29 PM

Yes, why does pre-approval not matter?? My husband and I are moving to WV from TX and we're going to buy a house. I am house hunting with a realtor next week, and was super stressed out that we haven't bothered to get pre-approved yet (my husband is commuting every week and is gone Mon-Fri). Do we NEED to? Or can we look seriously without it?

Also, what all documents do I need to get pre-approved? We're going to get one rate from our bank, but because there is no branch of our bank in WV, we have to do it over the phone with the national number!! Stress, stress.

Also! I was thinking that we should get a pre-approval/interest rate quote from our bank, and then another from a mortgage broker( for comparison sake). But, I assume they'll run our credit each time-and won't that hurt my score? It's really good right now, and I don't want to mess it up.

Wow, just from typing this now, my blood pressure has already gone up.

Benzgirl · #3 05-04-2008, 02:02 PM

Quote:

Originally Posted by JennRN

Yes, why does pre-approval not matter?? My husband and I are moving to WV from TX and we're going to buy a house. I am house hunting with a realtor next week, and was super stressed out that we haven't bothered to get pre-approved yet (my husband is commuting every week and is gone Mon-Fri). Do we NEED to? Or can we look seriously without it?

I have purchased 7 houses (I've always been single) and never was pre-approved. I didn't always go through the lending institution that I worked for. I only went to a familiar face when I needed to do some creative financing

Quote:

Originally Posted by JennRN

Also, what all documents do I need to get pre-approved?

Depends on if they are doing a full pre-approval or a pre-qual. Sometimes lenders vary. At minimum, you will need 2 years W2s, 3 months bank statements, last paychecks. If you own a business, you will need 2 years Tax Returns with all schedules. If someone is contributing to your down payment or closing costs, bring a Gift Letter. If you are selling a house, bring a copy of the listing. If you recently sold a house, bring the HUD-1 from the sale. If you are having your closing costs paid by an employer, have the HR department list what they will cover.

Quote:

Originally Posted by JennRN

Also! I was thinking that we should get a pre-approval/interest rate quote from our bank, and then another from a mortgage broker( for comparison sake). But, I assume they'll run our credit each time-and won't that hurt my score? It's really good right now, and I don't want to mess it up.

Interest Rate quote? Not sure what you mean. Until you have a sales contract in your hand, lenders can't lock in your interest rate. Running a credit report WILL, I repeat WILL hurt your credit score. Every time a lender does an inquiry, your score will drop. How much depends on what your original score is.

Tom Earp · #4 05-04-2008, 02:12 PM

As the Fed drops rates, it seems to do little for housing rates and my banker says stay put.

80% at 6.25 and 20% at 10.025.

I own a whole duplex, both sides, 2 bed room that I live in and the other side is 3 bedroom. Both have a 1 car garage, 1-1/2 baths and family room with a fire place.

It was split and I have no clue why but it does become a pain in the rear!

Right now may be a price game for property, but the interst rates are not doing anyone a favor.

Benzgirl · #5 05-04-2008, 01:24 PM

Quote:

Originally Posted by aggieAXO

I am just curious as to why pre-approval status does not make a difference? When I sold my house my realtor only considered offers from those that were pre-approved.

It's a Realtor-thing. Many of them think they are wasting their time (remember Commission only) if their buyer is not pre-approved. Pre Approvals are NOT required to put in an offer.

I've known of many buyers to be pre-approved for hundreds of thousands more than they can really afford because the LO told them they could afford $XXX, when much less was more realistic. Often, these are the people who end up losing their houses when the market turns. Our Loss Mitigation Department hears so often, "well the lender pre-approved me for that much".

aggieAXO · #6 05-04-2008, 11:50 PM

Quote:

Originally Posted by Benzgirl

It's a Realtor-thing. Many of them think they are wasting their time (remember Commission only) if their buyer is not pre-approved. Pre Approvals are NOT required to put in an offer.

I've known of many buyers to be pre-approved for hundreds of thousands more than they can really afford because the LO told them they could afford $XXX, when much less was more realistic. Often, these are the people who end up losing their houses when the market turns. Our Loss Mitigation Department hears so often, "well the lender pre-approved me for that much".

I was able to lock into an interest rate before I bought my house. This was in 2003 so maybe things have changed? Real estate was moving really fast here in Austin at the time so if you were not pre approved it was less likely that your offer would be taken seriously or even at all. When I put my house on the market I sold it within 24 hours-I would not have even considered a buyer that was not pre-approved. Things have definitely slowed down though.

justabeachbrat · #7 05-05-2008, 01:15 AM

Please be realistic. If your income doesn't add up for the home, don't try it and save. I am saying this because I will be packing after moving into a condo owned by my roommate. Her loan wasn't on a fixed rate, gambled on things going well, and her business caved in, so the condo goes, too. Her chaos isn't something she bothered to mention before I moved in. The place went on the market this week. If you can't afford it without involving others as far as bringing in roommates, wait.

Benzgirl · #8 05-05-2008, 08:20 PM

Quote:

Originally Posted by aggieAXO

I was able to lock into an interest rate before I bought my house. This was in 2003 so maybe things have changed?

Yes, everything has changed. We use to have a "lock and shop" program, which allowed you to lock in your rate without a property. However, the broker (wholesalers don't deal directly with the borrowers) would be penalized if they didn't produce a loan within 90 days. Typically, these rates were not great since the hedge on a 90-day lock is much riskier than a 30-day lock.

We discontinued the program before the market went south because pull-through was so low and we were losing money on the hedge. Often, borrowers just can't find a house (or make up their minds) in a particular timeframe.

JennRN · #9 05-06-2008, 11:22 AM

Update- I flew to West Virginia last week, and the husband and I house hunted for a day. We were not pre-approved at that time, but did it the next day. We found a house we loved! We started the bidding on it last week, and just found out this morning that we got it!!

Tom Earp · #10 05-06-2008, 12:41 PM

Quote:

Originally Posted by JennRN

Update- I flew to West Virginia last week, and the husband and I house hunted for a day. We were not pre-approved at that time, but did it the next day. We found a house we loved! We started the bidding on it last week, and just found out this morning that we got it!!

Congratulations and hope the % rate was reasonable!

It is nice to prop you feet up in your own little nest so to speak!

summer_gphib · #11 05-06-2008, 12:49 PM

Quote:

Originally Posted by JennRN

Update- I flew to West Virginia last week, and the husband and I house hunted for a day. We were not pre-approved at that time, but did it the next day. We found a house we loved! We started the bidding on it last week, and just found out this morning that we got it!!

Congratulations! Good luck with your home inspection and closing!