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Old 08-03-2009, 02:18 PM
 
88 posts, read 222,939 times
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I am looking to move to a new community within the next 2 years. My question has to do with whether I should have some kind of pre-approval letter from my credit union (where I expect to get my mortgage loan from) stating my authorized loan amount ahead of time or not.

In other words, should I have something ready or can a mortgage lender work quickly enough so I can work with the lender and then make an offer with a pre-approval letter within a few days of when it is posted for sale.

If I get it done now, would it have to be updated periodically? If updated periodically, is my credit score adversely affected if there are too many queries from a lender?

What sort of financial documents would a lender want to see?
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Old 08-03-2009, 02:23 PM
 
Location: Between Philadelphia and Allentown, PA
5,077 posts, read 12,101,442 times
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Quote:
Originally Posted by housewatcher View Post
I am looking to move to a new community within the next 2 years. My question has to do with whether I should have some kind of pre-approval letter from my credit union (where I expect to get my mortgage loan from) stating my authorized loan amount ahead of time or not.

In other words, should I have something ready or can a mortgage lender work quickly enough so I can work with the lender and then make an offer with a pre-approval letter within a few days of when it is posted for sale.

If I get it done now, would it have to be updated periodically? If updated periodically, is my credit score adversely affected if there are too many queries from a lender?

What sort of financial documents would a lender want to see?
We are ready to make an offer on a house, the owning realtor wanted a pre-approval letter before he would entertain any offers. In addition they requested that they "may" check credit and wanted our financial information to show that we were credit worthy. I guess depending on the situation it doesnt hurt to have a pre-approval. While they aren't going to actually check the credit (realtor) we had to fill out a financial paper showing liquid cash, savings, etc...
Hope this helps.
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Old 08-03-2009, 02:36 PM
 
Location: Philadelphia
244 posts, read 589,774 times
Reputation: 165
Quote:
Originally Posted by housewatcher View Post
I am looking to move to a new community within the next 2 years. My question has to do with whether I should have some kind of pre-approval letter from my credit union (where I expect to get my mortgage loan from) stating my authorized loan amount ahead of time or not.

In other words, should I have something ready or can a mortgage lender work quickly enough so I can work with the lender and then make an offer with a pre-approval letter within a few days of when it is posted for sale.

If I get it done now, would it have to be updated periodically? If updated periodically, is my credit score adversely affected if there are too many queries from a lender?

What sort of financial documents would a lender want to see?

By getting a pre-approval now all that you do is get an idea on what you will be approved for at this time. Your lender should be able to tell you when they pull your credit report what you need to take care of in order to get approved for a higher amount or a better interest rate. Other than that it is useless. Lenders and myself as a Realtor will not honor a pre-approval that wasn't issued within at least 3 months.
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Old 08-03-2009, 02:43 PM
 
Location: Southeastern Wisconsin
9 posts, read 19,282 times
Reputation: 11
While it may be helpful to talk to a lender now to see if there is something you can do in the coming months to help you get more favorable terms on a loan, actually getting the preapproval is something that doesn't need to be done until you are ready to seriously look at homes. Otherwise you will just keep updating it and the terms will change etc. This also gives you a chance to "shop" lenders, find out whom do you feel most comfortable with, etc.

byoak is right - no REALTOR worth their salt will accept an offer without a strong preapproval letter.

Good luck with everything and I'm just curious, what is making you wait to make the move?
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Old 08-03-2009, 05:59 PM
 
Location: Cary, NC
28,407 posts, read 50,513,320 times
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Quote:
Originally Posted by BeckyBrand View Post
While it may be helpful to talk to a lender now to see if there is something you can do in the coming months to help you get more favorable terms on a loan, actually getting the preapproval is something that doesn't need to be done until you are ready to seriously look at homes. Otherwise you will just keep updating it and the terms will change etc. This also gives you a chance to "shop" lenders, find out whom do you feel most comfortable with, etc.

byoak is right - no REALTOR worth their salt will accept an offer without a strong preapproval letter.

Good luck with everything and I'm just curious, what is making you wait to make the move?
?????
The Realtor is not the Principal in the transaction.
The homeowner/Seller gets to decide, and the Realtor only counsels.
If I refused an offer for a client because there was no preapproval letter...
It would be Real Estate Jail for me!
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Old 08-04-2009, 11:36 AM
 
Location: Philadelphia
244 posts, read 589,774 times
Reputation: 165
Quote:
Originally Posted by MikeJaquish View Post
?????
The Realtor is not the Principal in the transaction.
The homeowner/Seller gets to decide, and the Realtor only counsels.
If I refused an offer for a client because there was no preapproval letter...
It would be Real Estate Jail for me!

The offer is not valid if they can not prove that they can close on the deal.!! How can you get an offer from a buyer that is not pre-approved for a mortgage or have proof of funds? Because they said they are pre-approved? Any agent that sends me a pre-approval that was not done in at least the last three months should double check on what they are doing in this business. A pre-approval is only valid for 3 months if that now. If you present this offer and since they had their pre-approval they ended up missing payments here and there, their credit score goes down and now they can not be pre-approved are you acting in the best interest of your client? Now you are going through the motions getting the home inspected and then waiting for a mortgage commitment that is not going to come. If the buyer is a serious buyer they will go and get that second approval for themselves. Why waste everyone's time and get your sellers hopes up for something that is not going to happen? What is one of the first things you ask when you are interviewing a buyer you are going to represent?
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Old 08-06-2009, 02:43 PM
 
Location: wannabeinkentucky
859 posts, read 1,349,533 times
Reputation: 1022
We are getting ready to transfer, and when we start looking for a house in the new state, there is no way in hell the buyer's agent will know exactly how much we can borrow. When we bought this house, realtor used that information to get our exact price on the house we currently own even tho we found out after the fact we probably could have gotten it at least $5000 cheaper. She was pissed that we didn't buy the house she was seller's agent on [too many things needing repaired and owners were behind on payments which our agent "supposedly" found out only after we made an offer] and since it was a relo pkg she had to give the parent company 30% of her commission.

He/She will know a low figure - more at what we want to pay vs what we can afford to pay - and if we find a house that is higher, we'll get the letter to state what we are allowed to borrow, at the figure we want to pay.
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Old 08-06-2009, 03:01 PM
 
88 posts, read 222,939 times
Reputation: 51
MikeJaquish - Thanks for the reminder to all that the Realtor doesn't make the decision, but counsels.

Serate - This sounds like an excellent strategy. Thanks.

Can someone tell me what an average turnaround time is to get pre-approval docs from a lender? What docs does the lender want to see from me? I am inclined to want to get the docs when I see a home I want to make an offer on and time will be of the essence.
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Old 08-06-2009, 03:25 PM
 
27,629 posts, read 63,160,735 times
Reputation: 17006
The time to get a pre-approval can usually be measured with the minute hand on a clock. The computerized software takes about ten fields as input, queries a credit bureau online look-up for score and spits out an "up to $$$" number in less time that it takes to reboot a laptop...
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Old 08-06-2009, 03:28 PM
 
Location: Cary, NC
28,407 posts, read 50,513,320 times
Reputation: 26566
Quote:
Originally Posted by byoak View Post
The offer is not valid if they can not prove that they can close on the deal.!! How can you get an offer from a buyer that is not pre-approved for a mortgage or have proof of funds? Because they said they are pre-approved? Any agent that sends me a pre-approval that was not done in at least the last three months should double check on what they are doing in this business. A pre-approval is only valid for 3 months if that now. If you present this offer and since they had their pre-approval they ended up missing payments here and there, their credit score goes down and now they can not be pre-approved are you acting in the best interest of your client? Now you are going through the motions getting the home inspected and then waiting for a mortgage commitment that is not going to come. If the buyer is a serious buyer they will go and get that second approval for themselves. Why waste everyone's time and get your sellers hopes up for something that is not going to happen? What is one of the first things you ask when you are interviewing a buyer you are going to represent?
So, if an offer is not to your standards, you withhold it from your client?

My license would be less than toilet paper if I practiced that way.
I guess North Carolina is a little different than other states, in that we must present all offers.
I am not a principal, unless my name is on the deed, I have a financial interest in the property, or I am trying to buy in my name.

I must present all offers, and that includes incomplete offers.
Now, that does not preclude me strongly advising my client as to the pitfalls of an offer, but the client, the principal, decides whether to accept, counter, reject, or ignore.
Every time, without exception.
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