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I thought it was a lender reviewing your app and credit then giving a GFE on aspecific price and program. Now I'm being told that is just a pre-qualification. Am I supposed to submit all that paperwork (w-2s, stubs, etc.) to different people just to get an actal preapproval? I thought I was being smarter this time by shopping around, but if you have to go through all that just for a preapproval I wish I'd just picked one like we did last time.
yes a pre-qual is just reviewing app and reviewing credit, maybe running an automated underwriting program as well (if you allowed them to pull your credit).
Pre-approval is after the LO or Broker has received all documentation from you to verify everything.
You should not need a full pre-approval everytime you get a quote and GFE. The more info you give them the more accurate the quotes will be.
I spent 3 weeks between 2 companies; each stating they could offer lower rates than the other. The one that got our business was the one who had the best customer service & came through with the lowest rate.
Started off with 4. Each gave me GFEs but only two ran our credit b/c I ruled out the other 2.
If have decent credit, companies need your business right now & are willing to compete! Therefore, get the preapprovals & then from there keep getting more info.
Aye! So much paper!! I guess I'm just ready to be done after a terrible selling experience, closing then choosing another agent, mortgages, looking at houses, sheesh.
So, will they do another credit check once you submit docs, or is it just verifying the info?
Aye! So much paper!! I guess I'm just ready to be done after a terrible selling experience, closing then choosing another agent, mortgages, looking at houses, sheesh.
So, will they do another credit check once you submit docs, or is it just verifying the info?
It depends. Anyone can generate a GFE based on very simple info. The issue there is that the info you get back will probably be very broad & generic; especially when it comes to points & interest rate.
I would definitely ask everyone you speak with if they are going to run your credit. They are suppose to tell you, but I would never be 100% sure.
I have been told that when mortgage companies run your credit, it does not hurt your credit score due to the reasoning behind the credit being run
It depends. Anyone can generate a GFE based on very simple info. The issue there is that the info you get back will probably be very broad & generic; especially when it comes to points & interest rate.
I would definitely ask everyone you speak with if they are going to run your credit. They are suppose to tell you, but I would never be 100% sure.
I have been told that when mortgage companies run your credit, it does not hurt your credit score due to the reasoning behind the credit being run
Agreed! You should be able to shop the loan by supplying the lender with the "basic" information. Find out your credit score and then tell them what it is, asking them not to run your credit. Any lender should be able to give you a pretty accurate Good Faith Estimate at this point.
You really only need pre-approval when you're ready to make an offer on a home and you want to be assured that you'll qualify for the loan. A pre-approval is also more attractive to a seller than a pre-qualification. You'll be able to close quicker, too, because the majority of the paperwork is done. However, many a buyer who's comfortable they can afford a certain price range will typically only have a pre-qual from a lender rather than a pre-approval. When I'm working with first time homebuyers or someone who wants 100% financing, I prefer they are pre-approved.
You only want pre-approval from ONE lender, though - the lender you've chosen to work with based on your interviews and GFE's. You don't need to do a loan app in order to get a GFE, and you really don't want your credit run multiple times.
a Pre-Qual is when they review all the information that YOU have stated. You state your income, credit score, etc...and they give you a Pre-Qualification on those terms.
Pre-Approval is when they pull your credit, and go over employment, etc.
They usually dont review documents. Most lenders figure you might be shopping and will not waste the AU cert...
Mortgage/Loan Commitment is when the lender actually reviews your docs...runs the Automated Approval...Auto-App costs btwn 15-60 bucks....this is why they dont this with every borrower. Credit Reports may cost 12bucks per person as well. Also, the U/W views your documents, and approves your loan. Lender is willing to lend you money...but the property will need to pass appraisal...and other.
Title Commitment is when your home appraises at the value needed...and the lender issues the last document stating they're willing to lend you the money FOR THAT HOME.
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