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So what exactly is involved when you go to a mortgage company asking about buying a home? I currently own a home, know my credit score, and I am looking at moving. I've heard that you can pre qualify, but I'm not sure what that is. Or exactly how long it takes or what the steps are or if you should talk to multiple mortgage companies at once or one at a time, do they hurt your credit score? And how long does a pre qualify last? What if I don't find a home I like? What if I have a home in mind, can I just ask about that? How long does the process take? If I have a specific home in mind, do I talk to the realtor first or the mortgage company?
You should definitely speak with a mortgage professional first. Until you are prequalified, how do you know you will be approved to even buy the home.
I would recommend ask friends, neighbors, relatives, etc... for a referral to a good mortgage professional.
Pre qualified means you completed a loan application and had your credit ran and based on that information you are approved. To get final approval, you must document the information you provided in the loan application. For example, when you apply you are going to state what your income is and the approval is based on that . When your loan is submitted to underwriting, you are going to provide paystubs and W2's so they can document your exact income.
A mortgage professional can let you know the maximum amount of home you would qualify for so you dont have to have a specific home in mind.
What if I do have a specific home in mind? Do I mention it? And how long does this pre qualify last? How long do I have to find a home I like after I am approved? And how long does it take from going into the mortgage office to finding out if you are approved?
What if I do have a specific home in mind? Do I mention it? And how long does this pre qualify last? How long do I have to find a home I like after I am approved? And how long does it take from going into the mortgage office to finding out if you are approved?
Hi Bgmv90,
A pre-approval can take 15 minutes or 48+ hours depending on who you're working with and how prepared you are. In a lot of cases you can email or fax your pay stubs, w-2s/tax returns which saves you the time of driving somewhere and waiting. I typically take an application and pull credit while still on the phone with a client and then run their approval once I have the required documents. If you have a house in mind that can certainly help if you know the sales price and the annual property taxes.
A pre-approval letter is usually good for 3 months, after that you need to provide to your lender with documents again so they can check your up-to-date financial situation. But maybe it's just a general pre-approval letter, if you have a specific house already, give them the address so they can give you the accurate loan that you can afford.
My 2cents
Oh I am so confused. So some questions...
1. What exact documents would they want?
2. Is it better or not to have a specific property in mind?
3. If you live in one state, but want to move to a different state, does this matter?
4. So they pull your credit, so this would lower your credit, so do you need to know which bank/mortgage office you want to go with? Or do you shop around?
5. What is the correct order from start to finish in which you do things?
6. So if you get a pre-approval letter, it is written in stone for what you can get, the bank can't change their mind right?
7. What does the pre approval letter qualify you for? Just the total amount of the purchase price?
8. So if you get a pre approval letter for x amount of money/purchase, you can freely look at any house that is that price or under right?
9. Would it be better to find a house I like first, pretty much knowing how much I can afford, then go to the mortgage place with the house in mind?
10. Do you choose a mortgage/bank company? Or a person mortgage officer?
11. What is the difference in how they determine if you are qualified if you go to them with no house in mind, or go to them with a specific house in mind?
Sorry for all the questions, but this is confusing, I want to be prepared as much as I can, and I want to make sure that I know what I am doing and what to expect. Thanks for all the help.
It IS conusing - and it's good that you are asking these questions.
I'd refer you to this site which can answer all these questions plus those you haven't thought of yet. The link goes specifically to a page about pre-qualifying, but look around the site and you'll find tons (more than you need) of information.
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