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Old 05-10-2018, 07:02 AM
 
30 posts, read 9,962 times
Reputation: 33

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Agents which help to find house insist that pre-approval is not enough these days - houses are sold in minutes, and to increase chances to get contract it is highly recommended to be not just pre-approved, but to obtain loan commitment from lender *prior* starting looking for house.

Is it really normal practice to go this way?

I'm not sure how it works, how can you lock mortgage amount without knowing what house you gonna buy?

Does anyone can provide some knowledge on this?

Also, talking about loan commitment, when exactly will I be able to get details on terms, interest and etc.? I mean to ask, can lender give me this details before I submit them all the documents, so I have a chance to decide if it is good deal, or better look for different lender?
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Old 05-10-2018, 09:01 AM
 
244 posts, read 123,137 times
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https://www.rubyhome.com/home-loans/...itment-letter/


If you are dead set on purchasing a home in a hot sellers market then I can see how it would be helpful to your chances.
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Old 05-10-2018, 09:38 AM
 
10,218 posts, read 6,355,953 times
Reputation: 10770
Quote:
Originally Posted by phantom4 View Post
Agents which help to find house insist that pre-approval is not enough these days - houses are sold in minutes,
Is it really normal practice to go this way?

I'm not sure how it works, ?
It's not the norm in most places. If you are in a hot housing market where homes are sold quickly then this may be necessary, and real estate agents and local banks would know more about this. Best to ask your lender how it works. Maybe go in and get a preapproval and ask about it. It sounds crazy, but if I was in a crazy market and it was the only way to get a house I would find out about it and consider it.
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Old 05-10-2018, 09:44 AM
 
10,218 posts, read 6,355,953 times
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Quote:
Originally Posted by Grumpty View Post
https://www.rubyhome.com/home-loans/...itment-letter/


If you are dead set on purchasing a home in a hot sellers market then I can see how it would be helpful to your chances.
I don't see how you would get a commitment letter prior to finding a home. You need the property address, you may need an appraisal and it will take 20 to 30 days to go thru underwriting to get a commitment letter.

I think the only way is to find a home at the price range you want or the highest you can afford. Apply for a commitment letter and when approved use it to view other properties.
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Old 05-10-2018, 10:49 AM
 
3,301 posts, read 7,196,529 times
Reputation: 4073
Quote:
Originally Posted by phantom4 View Post
Agents which help to find house insist that pre-approval is not enough these days - houses are sold in minutes, and to increase chances to get contract it is highly recommended to be not just pre-approved, but to obtain loan commitment from lender *prior* starting looking for house.

Is it really normal practice to go this way?

I'm not sure how it works, how can you lock mortgage amount without knowing what house you gonna buy?

Does anyone can provide some knowledge on this?

Also, talking about loan commitment, when exactly will I be able to get details on terms, interest and etc.? I mean to ask, can lender give me this details before I submit them all the documents, so I have a chance to decide if it is good deal, or better look for different lender?
No.

I'm in a very hot market and sometimes people whine about the difference between Pre-Qualification and Pre-Approval, and that's as far as it goes.
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Old 05-10-2018, 11:07 AM
 
10,218 posts, read 6,355,953 times
Reputation: 10770
Quote:
Originally Posted by phantom4 View Post
Agents which help to find house insist that pre-approval is not enough these days - houses are sold in minutes, and to increase chances to get contract it is highly recommended to be not just pre-approved, but to obtain loan commitment from lender *prior* starting looking for house.

Is it really normal practice to go this way?

I'm not sure how it works, how can you lock mortgage amount without knowing what house you gonna buy?

Does anyone can provide some knowledge on this?

Also, talking about loan commitment, when exactly will I be able to get details on terms, interest and etc.? I mean to ask, can lender give me this details before I submit them all the documents, so I have a chance to decide if it is good deal, or better look for different lender?
On further inspection I think you just posted part of an article from Zillow by some bored writer who wanted to write something to catch people's attention.

Get an agent. If they tell you that you need a commitment letter find another agent until you find one who doesn't tell you that. If they all tell you that you need it then find out what their process is.
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Old 05-10-2018, 01:28 PM
 
244 posts, read 123,137 times
Reputation: 208
Quote:
Originally Posted by LifeIsGood01 View Post
I don't see how you would get a commitment letter prior to finding a home. You need the property address, you may need an appraisal and it will take 20 to 30 days to go thru underwriting to get a commitment letter.

I think the only way is to find a home at the price range you want or the highest you can afford. Apply for a commitment letter and when approved use it to view other properties.

Seems possible but uncommon. Per the article I linked...


Most of the time, commitment letters are not written up without a property appraisal. In a small number of cases lenders may issue the letter without an appraisal, but itís quite uncommon.
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Old 05-10-2018, 01:40 PM
 
10,218 posts, read 6,355,953 times
Reputation: 10770
Quote:
Originally Posted by Grumpty View Post
Seems possible but uncommon. Per the article I linked...


Most of the time, commitment letters are not written up without a property appraisal. In a small number of cases lenders may issue the letter without an appraisal, but itís quite uncommon.
But it still would have to go thru underwriting which takes at least 20 days, so you could not use it for homes that sell the same day, All you could do is hold on to it and show the letter to future home owners that you got a commitment letter after the property was under contract.
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Old 05-10-2018, 02:07 PM
 
Location: Rochester, WA
3,709 posts, read 1,952,776 times
Reputation: 10190
Quote:
Originally Posted by Pfhtex View Post
No.

I'm in a very hot market and sometimes people whine about the difference between Pre-Qualification and Pre-Approval, and that's as far as it goes.
This. Don't worry about the distinction between pre-quals and pre-approvals. And you won't get loan commitment before the house. That's not how it's done.

It is true that not all pre-approvals are the same. There are lenders and mortgage brokers who are highly regarded, and those that are *not*. Talk to your realtor, and unless you have really good reason not, go with a lender who has a great reputation for getting the loan closed ON TIME. Who the loan officer is has made the difference in which offer to accept when there are many to choose from. Moreso than loan type.
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Old 05-10-2018, 02:14 PM
 
72 posts, read 32,136 times
Reputation: 140
When I was ready to purchase last year, I requested full approval prior to starting my home search. My file DID go through underwriting which took approximately 3 weeks. Obviously they can’t give 100% approval until property has been placed under contract.

Once I found the home I wanted, I closed within 11 days. Had to move fast on inspection but bank sent appraiser out in 3 days which really helped.
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