Pre-approved for a mortgage (loan officer, approval, credit score, financing)

[beckycat]

Are there many factors that can go wrong with obtaining financing after you've been pre-approved?

[Fant]

Preapproval is usually done based on a simple calculation of your income/debt/credit score. They do not verify anything they just take your word. Once you actually apply, they do a more thorough investigation of your paperwork. If it turns out your financial position is worse than what you tell them for the pre-approval then it can lead to problems. If not, then there shouldnt really be much of a problem other than making sure the house appraises well.

[teebopop]

Is this true for VA backed loans as well?

(We're about to sign the official application for a pre-approved loan and have a contract to purchase.)

The price of the home is definitely within our budget ($150k) even though we were preapproved for $175k. We knew that we were going to cap it at $150k even if the bank said we could have $250k.

Hubby's credit score is 833; mine 749.

Have savings of $11k. Our income to debt ratio is just about 10%.

I think our biggest problem is the VA Appraiser. We believe it will appraise for about $20k more than we offered.

And, I have no idea just how long after we sign the loan application tomorrow it will take to hear a definite "yay" or "nay." I'm assuming it has to wait for the VA appraiser ... which could be a while because it's a new construction and it has about 9 weeks to go before completion.

Oi vey. I don't know if I can hold out that long!

[dad2jules]

If you gave your loan officer good information on income and assets that you have documentation for- no problem. The appraisal coming in higher than your offer is again- no problem.

You can have your loan fully underwritten with the only remaining item to be the final appraisal. Satisfactory appraisal means nothing more than the appraised value is at least your purchase price.

You have time to spare with 9 weeks to go so relax and enjoy getting ready for your new home.

[mrsclmn]

Tee, you'll get the loan approval BEFORE the appraisal. We've already got the commitment letter and we are waiting on new construction as well. WOW, we could be cyber twins because we have almost the same snapshot, even down to approval amounts and purchase price. We got approved for 180K and purchase price is about 155K but we knew we weren't going higher than that, because we wanted to be SURE that should anything happen and neither of us had a job, we could make mortgage payments easily with hubby's retirement pay.

[suzie02]

Originally Posted by teebopop

The price of the home is definitely within our budget ($150k) even though we were preapproved for $175k. We knew that we were going to cap it at $150k even if the bank said we could have $250k.

Hubby's credit score is 833; mine 749.

Have savings of $11k. Our income to debt ratio is just about 10%.

I think our biggest problem is the VA Appraiser. We believe it will appraise for about $20k more than we offered.

And, I have no idea just how long after we sign the loan application tomorrow it will take to hear a definite "yay" or "nay." I'm assuming it has to wait for the VA appraiser ... which could be a while because it's a new construction and it has about 9 weeks to go before completion.

Oi vey. I don't know if I can hold out that long!

I do not know anything about VA but everything else looks great.

If the house appraises for more that the purchase price then it is even better.
It means your have immediate equity. Why do you think the house will appraise for more than market value. Prices are dropping.

The only thing that can cause problems after a pre-approval is if the property value is less than expected. Then the loan would be for less money and you would have to come up with the difference or cancel the deal. Of course this is not you case.

You do have an appraisal contingency on your purchase offer right?

[teebopop]

Eerie ... isn't it?

What State do you live in? I'm in PA but buying in NC.

I ask because the house I am buying is only the third one to be built in the development (only 20 will be built eventually). And only one other one has a contract besides us.

Good luck on your process ... keep me posted!

Originally Posted by mrsclmn

Tee, you'll get the loan approval BEFORE the appraisal. We've already got the commitment letter and we are waiting on new construction as well. WOW, we could be cyber twins because we have almost the same snapshot, even down to approval amounts and purchase price. We got approved for 180K and purchase price is about 155K but we knew we weren't going higher than that, because we wanted to be SURE that should anything happen and neither of us had a job, we could make mortgage payments easily with hubby's retirement pay.

[teebopop]

Yes ... we have an appraisal and inspection contingency on our contract.

I think that because of the quality of the construction, the size of the property, and location.

For example, the builder built a deck on the back of the house, used ceramic tiles in both bathrooms instead of vinyl, hardwood floors everywhere except bedrooms, recessed lighting, ceiling fans, higher end appliances, upgraded cabinets and countertops throughout, 2-car garage, cement driveway and walkways, etc.

The total square foot is just under an acre. It's on a cul-de-sac street, surround by mature trees (it looks as though he nestled the house in the midst of trees so as to not disturb the landscaping) in the burbs.

He's got 11 acres and can only build 20 homes and he's definitely not a cookie-cutter kind of guy.

I really think that if I was to buy this house maybe a few years ago, it would have appraised at at least $225k. I've been looking for a while (18 mos.) and priced out comps and was very pleased with the entire transaction amounts.

Plus, he's customizing both bathrooms to be ADA compliant (walk-in shower in the master plus ADA height toilets for my disabled husband ... that added $3k to the price ... not counting labor ... and he only added $2,500 to the asking price.

I think that the price of the houses are dropping ... true for resales. And the prices of new construction are dropping. But I don't think that it's the actual house that's causing it but that builders are not over-charging for appliances, upgraded carpeting, wood cabinets etc. like they once were and getting away with it.

Maybe I'm wrong ... But I can't help but look at the house we're buying and believe that we are paying for a house that has a price that is not over-inflated like they have been in the past 10 years.

Just MHO.

Originally Posted by suzie02

I do not know anything about VA but everything else looks great.

If the house appraises for more that the purchase price then it is even better.
It means your have immediate equity. Why do you think the house will appraise for more than market value. Prices are dropping.

The only thing that can cause problems after a pre-approval is if the property value is less than expected. Then the loan would be for less money and you would have to come up with the difference or cancel the deal. Of course this is not you case.

You do have an appraisal contingency on your purchase offer right?

[suzie02]

Originally Posted by teebopop

I think that because of the quality of the construction, the size of the property, and location.

For example, the builder built a deck on the back of the house, used ceramic tiles in both bathrooms instead of vinyl, hardwood floors everywhere except bedrooms, recessed lighting, ceiling fans, higher end appliances, upgraded cabinets and countertops throughout, 2-car garage, cement driveway and walkways, etc.

The total square foot is just under an acre. It's on a cul-de-sac street, surround by mature trees (it looks as though he nestled the house in the midst of trees so as to not disturb the landscaping) in the burbs.

He's got 11 acres and can only build 20 homes and he's definitely not a cookie-cutter kind of guy.

Those things will give you an edge if you want to sell the the house in the future. Appraisers don't care.

Originally Posted by teebopop

I really think that if I was to buy this house maybe a few years ago, it would have appraised at at least $225k. I've been looking for a while (18 mos.) and priced out comps and was very pleased with the entire transaction amounts.

Forget about a few years ago. The builder where I lived is selling the same exact floor plan for 40-50K less that 2 years ago. The houses were 250k+ then and they are 200k+ now.

Originally Posted by teebopop

Plus, he's customizing both bathrooms to be ADA compliant (walk-in shower in the master plus ADA height toilets for my disabled husband ... that added $3k to the price ... not counting labor ... and he only added $2,500 to the asking price.

These things may actually make the house harder to resell.

Originally Posted by teebopop

Maybe I'm wrong ... But I can't help but look at the house we're buying and believe that we are paying for a house that has a price that is not over-inflated like they have been in the past 10 years.

If the house is within the comps then you are paying market value and that is all that matters. Congratulations on your new home.

[teebopop]

Thanks!

We have no intention of ever selling our house. We waited until the kids were grown and gone to buy ... so this is our retirement home.

Originally Posted by suzie02

Those things will give you an edge if you want to sell the the house in the future. Appraisers don't care.



Forget about a few years ago. The builder where I lived is selling the same exact floor plan for 40-50K less that 2 years ago. The houses were 250k+ then and they are 200k+ now.



These things may actually make the house harder to resell.



If the house is within the comps then you are paying market value and that is all that matters. Congratulations on your new home.