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Old 02-28-2017, 08:38 AM
 
27 posts, read 19,924 times
Reputation: 10

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Starting to look for a home, expecting to buy in the next six months.
I have a high FICO and no debt.

How long does it take to get a pre-approval letter? What documentation is needed at this step?
Is the documentation submitted on line or copies of actual statements needed?

I am trying to have a "current" pre-approval letter when I decide to make an offer, and not having to renew it
if the letters "expired"

Thanks for your help
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Old 02-28-2017, 08:57 AM
 
11,619 posts, read 8,466,630 times
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Half hour or less. You can go to a bank or do it online with a mortgage broker on the phone or do it online automated, but they may call you before you get the results.

For a preapproval all you need to is to supply the info on your income and assets and debts (and any coborrower) then you have to give them your social security number so they can run a credit report. For a prequalification you need bank statements, tax records or W2 forms, bank statements and documents to back up the info given for a prequal.

They don't have an expiration date per se. If you get preapproved and the bank or lender puts in a lending rate % it may expire in 60 days or whenever it says, but it doesn't mean the letter is bad.

The main reason you would need a preapproval or prequalification letter is to make an offer, or the Real Estate agent may ask to see it in order to show you homes so they know you are serious and can qualify to buy the home you want to look at. They don't want to waste their time showing you $500K homes when you can only afford a $100K one.

Last edited by LifeIsGood01; 02-28-2017 at 09:24 AM..
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Old 02-28-2017, 09:24 AM
 
Location: Rochester, WA
6,831 posts, read 3,922,319 times
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I propose you look at this another way... Getting a preapproval is not a one-time deal where you go in to a bank and get one letter you take with you everywhere.... You should in fact get a new one for each offer, dated for the date of your offer.

It's a collaborative process between you, your lender, and your realtor. You stay in contact through the process, discussing any lender issues with each proposed property, and then when you do make an offer, you get a letter, within minutes usually, that is specifically tailored for that offer. ..."RE: Preapproval for XXX Y Street at the offer price of $_______."

Get some recommendations from your realtor, for local lenders or mortgage brokers who work the type of loan, or the type of home you're buying, often. Stay in contact for each home you make an offer on.

That's how it works the best. Most lenders who work with realtors often can get a letter out to your realtor with a few keystrokes, over the phone, while you're working on the terms of your offer.

It's not a one time deal. And you wouldn't want it to be. You don't want to get qualified to spend up to $300,000 and give that letter to a seller who you're wanting to bargain down to $250K from $260K. You want the letter to reflect the offer you're making.

Your lender needs to become one of your best friends in the process... second only to your realtor.

Last edited by Diana Holbrook; 02-28-2017 at 09:34 AM..
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Old 02-28-2017, 12:27 PM
 
3,639 posts, read 7,943,030 times
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Quote:
Originally Posted by Diana Holbrook View Post
I propose you look at this another way... Getting a preapproval is not a one-time deal where you go in to a bank and get one letter you take with you everywhere.... You should in fact get a new one for each offer, dated for the date of your offer.

It's a collaborative process between you, your lender, and your realtor. You stay in contact through the process, discussing any lender issues with each proposed property, and then when you do make an offer, you get a letter, within minutes usually, that is specifically tailored for that offer. ..."RE: Preapproval for XXX Y Street at the offer price of $_______."

Get some recommendations from your realtor, for local lenders or mortgage brokers who work the type of loan, or the type of home you're buying, often. Stay in contact for each home you make an offer on.

That's how it works the best. Most lenders who work with realtors often can get a letter out to your realtor with a few keystrokes, over the phone, while you're working on the terms of your offer.

It's not a one time deal. And you wouldn't want it to be. You don't want to get qualified to spend up to $300,000 and give that letter to a seller who you're wanting to bargain down to $250K from $260K. You want the letter to reflect the offer you're making.

Your lender needs to become one of your best friends in the process... second only to your realtor.
Unless you're actually talking money and lending.
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Old 02-28-2017, 02:43 PM
 
Location: Rochester, WA
6,831 posts, read 3,922,319 times
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I'm talking about finding a lender who is helpful and responsive when you call.
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Old 03-01-2017, 08:14 AM
 
Location: MID ATLANTIC
7,851 posts, read 19,207,751 times
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I operate exactly as Diana recommends. Why insult a seller with a letter that says "I can really pay 25K more, but I don't think your home is worth it?" Snap, you have a seller attitude before getting out of the gate.

For a pre-approval letter, all it takes is a computer to pull credit and DU to run your specific scenario. If you don't get the home, we continue to collect documents to work for a full underwriter pre-approval, including a written commitment. That allows for stronger language in your pre-approval letter, "borrower's credit, income, assets, and liabilities reviewed by an underwriter and a loan commitment has been provided to borrower, with the following primary conditions: appraisal to support purchase price, satisfactory title, blah, blah, blah." (Never hand over a loan commitment over to anyone).

My buyers that are out looking know I am almost always within 2 hours to my computer. (It can take two hours for the Realtor and buyer to get the offer ready). But even if I am caught off guard, I am certainly available to speak to the seller's agent, not to replace the letter, but to assure it's a qualified buyer making the offer. If I know I have buyers out and I am away or out of touch, I've provided multiple letters in increments of 10K.

Some places cannot handle this flexibility, so do ask has the letters are handled. I seriously advise you to reconsider a lender that cannot put you in the best bargaining position.
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Old 03-01-2017, 09:24 AM
 
Location: Cary, NC
34,584 posts, read 60,207,244 times
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Don't overthink it. Just don't pay more than you think a property is worth.

If you limit it to the price of the property, the seller may well wonder if you are maxed out and living on the edge, and someone with a higher preapproval will look stronger and more likely to close.

Get a preapproval letter from a lender you like for an amount you are comfortable with. It may be good for 60 or 90 days, depending on the lender. If it is a month out and a seller wants it updated, that is no big deal.
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Old 03-01-2017, 03:02 PM
 
Location: Raleigh
29 posts, read 26,823 times
Reputation: 68
SmartMoney and Diana are correct! I also suggest when you find your lender, make sure it's someone you trust and are comfortable with! That will make the process easier!
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