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Old 06-10-2009, 02:28 PM
 
15 posts, read 47,704 times
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Hi,
I'm a first time buyer and in the process of getting a loan. Just spoke with a loan manager at my bank (Chase) and he told me the rate can be locked only when the contract is signed. Reading through this forum I got the impression that I can have it locked (for a fee) when I was pre-approved.
He also said that there is no difference between pre-qualification and pre-approval, both cost $295. Its the first bank I checked about loans...

Thanks
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Old 06-10-2009, 02:39 PM
 
Location: Long Island
9,432 posts, read 20,197,276 times
Reputation: 5144
Quote:
Originally Posted by api_nyc View Post
Hi,
I'm a first time buyer and in the process of getting a loan. Just spoke with a loan manager at my bank (Chase) and he told me the rate can be locked only when the contract is signed. Reading through this forum I got the impression that I can have it locked (for a fee) when I was pre-approved.
He also said that there is no difference between pre-qualification and pre-approval, both cost $295. Its the first bank I checked about loans...

Thanks
Yes, you need a contract to lock in a rate.

Regardless of whom you use to get your mortgage, don't bother with a pre-qualification - please get a pre-approval. Also, if you have a local Savings and Loan bank, you might get a better rate or at a Credit Union.

If you want more info, send me a DM
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Old 06-10-2009, 02:53 PM
 
28,461 posts, read 75,173,060 times
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Well that is not exactly true...

EVERYONE in the mortgage business has a standard for using "prequalification" to mean KNOWING WHAT YOUR FINANCIAL PICTURE will allow your mortgage limits to be. If you decide to proceed to APPLY for a mortgage from that lender they CONDITIONALLY approve your loan subject to normal underwriting standards AND THE ACTUAL property you make an offer on.

Chase makes this clear on their web site: First Time Buyer Mortgages - First Time Home Buyer Loans - First Time Home Buyer Programs

Chase's own website also spells out the standard means of proceeding to closing:

First Time Buyer Mortgages - First Time Home Buyer Loans - First Time Home Buyer Programs


I suspect their web site specifically does not mention an application fee because that gives them some flexibility about who and when they impose this fee on.

In other words, it is entirely possible that if they sent you something in the mail with you checking statement or credit card bill that is "good for X dollars off a mortgage pre-approval" or "bring this coupon in for a free pre-qualification if you are thinking of buying a new home" the offer would be pretty meaningless.

The approval process does cost them a bit of time / manpower, but that fee is more about locking you in.

Clear?

Oh, and when it comes to locks, the technical truth is that you CANNOT get a locked rate until you have a property in consideration, but the way that mortgage brokers "shop the rates" they will have various terms. If you have a good idea that you will need / want an extended period to close it may be smart to have broker shop for the lender offering the LONGEST lock period at the best rate. If that is not the case then you can have the broker shop all loans with the assumption that they are priced with 30 day locks.

I am sure that the loand originator at Chase or any other lender that you approached directly could look-up the lock period and rate charges.
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Old 06-10-2009, 03:07 PM
 
Location: Long Island
9,432 posts, read 20,197,276 times
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Quote:
Originally Posted by chet everett View Post
Well that is not exactly true...

EVERYONE in the mortgage business has a standard for using "prequalification" to mean KNOWING WHAT YOUR FINANCIAL PICTURE will allow your mortgage limits to be. If you decide to proceed to APPLY for a mortgage from that lender they CONDITIONALLY approve your loan subject to normal underwriting standards AND THE ACTUAL property you make an offer on.
Thanks, Chet!
I understand about the conditional approval :-)
Unfortunately I do know mortage brokers that will issue a pre-qual at the drop of a hat, without truly going over the buyers' financial picture - I've learned to stay away from them!

In our neck of the woods, Agents and Sellers (even some Attorneys) usually want to see a pre-approval - but this forum isn't limited to Long Island
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Old 06-10-2009, 04:31 PM
 
15 posts, read 47,704 times
Reputation: 12
Default Thank you!

Chet and Elke, thanks a lot for making it clear! I will check other lenders rates (bad thing rates seems started to change daily and even twice a day as it was today - as Chase guy said), so its hard to compare several institutions.

Alex
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