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I've been working with a lender who helped me boost my score up high enough to get a FHA loan approved. Hubby is 680, I am now 655 fico. He just told me I can now go pick out any home I want and we talked for an hour about the rates, down payment etc. I have studied up on everything for a year since we moved to Houston from Detroit last September. I know everything about where the lower property tax rates are, driven through tons of neighborhoods, mud tax, pretty much all the ins and outs. I love to research. My budget is $160,000-$200,000 but I am staying on the low end to keep my payments down.
Heres a quirk though:
My realtor wants a preapproval letter and my mortgage guy wont provide one until he sees our contract letter when we want to make a bid. He said he can get the preapproval letter done within an hour.
Is this normal? Why on earth would he hold back the pre approval? It is because my range is so wide? I told him we are only going to go as high as $169,500.
If your mortgage broker won't give you the full-blown approval letter, you're not fully ready to be approved. There is something significantly wrong here. Your realtor only needs a basic approval, saying your credit has been checked, that your employment has been verified, and your W-2's are verified. It will have a generic term of the type of financing, etc. The loan amount is not completely necessary for your realtor, however if you want them to talk, then have the realtor talk with the mortgage broker.
A full blown GFE will have the exact address, amount and mortgage payment along with the program and type of financing you will be using.
Agree. Time to shop for another lender.
Why does the Realtor need the letter? Did you mention you had bad credit?
A Realtor can ask for a pre-approval from their client to make sure that the person they are going to show homes to is actually qualified to buy a home. You would surprised at how many tire-kickers out there want to see homes outside their budget because of HGTV. It is also a courtesy for the sellers of those homes to know that they are opening their doors to real buyers not just lookers.
I think your Realtor should be asking for a pre-qualification letter. You also want to have that in hand in case the right house is found and your offer will be much stronger with that letter.
Followup: We visited a home yesterday and I asked the lender for a preapproval letter so we could actually make an offer. He had it to us within an hour. Strange.
Followup: We visited a home yesterday and I asked the lender for a preapproval letter so we could actually make an offer. He had it to us within an hour. Strange.
Great! Thats how exactly it works. The lender/broker do not need sales contract to provide a pre-approval letter.
Good Luck!
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