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First home purchase, I do have a Realtor, but I like to triple check things for myself.
I was preapproved when I first started looking. I have now found a home that I am interested in, we have agreed on a price. Planning for an inspection Sunday.
Question is, should I go to the bank and apply for the mortgage with the purchase agreement in hand on Saturday, or wait till after the inspection? logistically with work, I can only do weekends, and Id have to delay my departing for xmas trip if I have to go to the bank next weekend.
2nd question, the seller wants to move out mid February. I am fine with that as my current lease expires early march. They are talking about leasing the house back after closing till February... I suggest we just close in mid February to avoid back payments and other potential issues. My Realtor is not sure if the bank will lock the rate for 60+ days. Is that extraordinarily long?
I personally forward all ratified paperwork to the lender upon receipt (so that I can also get the appropriate contact info for title company, entry information for appraiser etc). I'd have your agent do the same. It will take your lender some time to draw everything up, at that point, they could likely email it to you.
a rate lock that exceeds 60 days (45 in some cases) will likely cost you. tread lightly on allowing the seller to rentback for a couple weeks.. have your agent explain the repercussions of this vs. closing early (forcing the seller out) vs. floating your rate until you're within a window where locking the rate wont cost you vs. paying for an extended rate lock
Your contract might specify how much time you have to apply for a loan. Whatever you decide, make sure you are complying with the terms of your contract.
First home purchase, I do have a Realtor, but I like to triple check things for myself.
I was preapproved when I first started looking. I have now found a home that I am interested in, we have agreed on a price. Planning for an inspection Sunday.
Question is, should I go to the bank and apply for the mortgage with the purchase agreement in hand on Saturday, or wait till after the inspection? logistically with work, I can only do weekends, and Id have to delay my departing for xmas trip if I have to go to the bank next weekend.
2nd question, the seller wants to move out mid February. I am fine with that as my current lease expires early march. They are talking about leasing the house back after closing till February... I suggest we just close in mid February to avoid back payments and other potential issues. My Realtor is not sure if the bank will lock the rate for 60+ days. Is that extraordinarily long?
Well, there's one way to find out if they offer a 60 day lock: Ask the lender.
Your contract may have deadline dates that dictate when you have to have your financing application made and when you have to have a commitment. Check your contract.
A pre-approval is usually only worth the paper it's written on -- unless your bank did a complete credit underwriting, it's just an estimate. You need to give them as much time as possible for credit and appraisal underwriting. Plus, you may be subject to new underwriting guidelines after the beginning of the year that may affect your pre-qualification. Personally, I would make the appointment ASAP. Any loan officer worth his/her salt will meet you in the evening if you make an appointment. If the loan officer can't -- look for another loan officer. There's even on-line options, too. If you can only get a 45 day lock, go ahead and lock it in. You're talking about the difference of a couple of weeks in February -- get an extended occupancy agreement signed. Alternatively, you may also be able to wait to lock your loan rate in in January for a mid-Feb. closing. Again: Check with your lender.
Whether worth it or not it is popular in some areas to have the pre approval letter with the contract.
Since your time is limited you can set up an appointment with the loan officer, letting them know the inspection hasn't been done yet. You won't want to pay for your credit report and appraisal...whatever is done in your area.... until you are sure you like the inspection.
Whether worth it or not it is popular in some areas to have the pre approval letter with the contract.
Let's just put it this way -- it's generally a waste of time to count on the "pre-approval" letter as a shoe-in for financing. There are some lenders around here that we KNOW just issue a letter with the caveat "pending credit and income verification." Well, duh. Useless, and a waste of time. I mean, I've had letters from lenders who said that the would-be buyer is approved "up to $XXX,XXX", but when we call to verify, they've said, "well, how much do you need it to say?" Basically, those letters we just stick in the back of the file and ignore them.
On the other hand, there are lenders who have true "pre-approvals", who have done all of the personal credit underwriting and just need an appraisal for the last piece of the puzzle. THOSE, we give more credence to. Given multiple offers, if we had a client with a true pre-approval, and a "fake" pre-approval, guess which one we'd rather deal with?
Any real estate agent that does not have a list of about half a dozen or so lenders that will supply quoted upcharges for 45, 60 day (or longer...) locks is likely not very experienced.
The language of pretty much ALL "pre-approvals" is such that that the lender leaves themselves a GIANT out if income / credit at closing does not match the earlier info however so long as the OP, as buyer, has a normal job with regular wages and no signficant changes in their employment status / no significant new debts they probably need not worry too much. Lender ought to be able to give a fairly detailed / accurate calendar of all the steps needed from agreed to sales contract through the actual close. Most experienced real estate agents have done several deals where the buyer or seller was on vacation /out of the country and all needed paperwork was reviewed electronically and appropriate attorney authorizations were in place -- there should be no reason for the OP to miss work / delay Christmas travel..
The secondary issue of allowing the seller to rent back is something that I have helped both buyers and sellers with and have even used my self. The keys to success are having a VERY SOLID REASON for the rent back -- if the seller is building a new home and merely wants to stay put so their kids can finish out school term without disruption that usually works fine, seller should assume a week or two past when the builder "promised" everything would be finished... If the seller has a completely employer provided relocation package that is also very likely to work well.OTOH ff the seller is not all lined up with a place to move I would be a lot less confident the move-out happens on time. If the seller has financial issues this is no different than a renter than has a history of credit problems -- just like I would want a credit report from a prospective tenant it would behoove the buyer, who will be a temporary landlord, to get appropriate information on the renter. Sufficient security deposit should certainly be part of the lease period and very stiff penalties for any damage to what is now the buyer's house should be spelled out AS WELL AS a schedule of penalties if the home is not vacated in a timely / agreed to date...
It might help people in answering to know what state are located in, I say that because I am in NY and typically closings here take about 3 months so your timeline sounds short to me. However I know people in AZ who have closed in about a month. (Also here we use a lawyer whereas the deals in AZ that I know used a contract provided by the realtor.)
Also ask you lender about the fees for the mortgage application, ours allowed us to come in and do all the paperwork when we first made the offer and they had us sign papers authorizing the charge for the credit report and appraisal fees but they didn't actually do anything until we told them we were ready. (Or in a prior case, I think they put a charge on our credit card to ensure they would get the money but when the appraisal never got done as we backed out after the inspection, they reversed the charge.)
Your pre-approval letter is probably not worth the paper it is written on.
Get the Inspection done, get the report, and if it is acceptable to YOU, then file for financing.
It is mid December. The holidays are coming up, so nothing will happen to your paper work before January. That puts you on pace to close sometime late February/Early March if all goes well,.
That solves your rental problem, etc. Simply put some language in your contract which fits YOUR schedule....."closing on March 1 subject to inspection/conventional financing", or whatever suits you.
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