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  1. #1
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    Pre-Approval for first time home buyer?

    I was curious if anyone has had any recent experience with this process? Like where did they go and how the experience was.

    I am looking at starting the process soon and any tips or pointers would be great.



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    Re: Pre-Approval for first time home buyer?

    I just bought my first home in October. I have very little debt and a pretty good income, so my realator took care of the pre-approval. And it was just a letter from a lendor that I was approved for a certain $ amount.

    If you have any specific questions, let me know.



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    Re: Pre-Approval for first time home buyer?

    be prepared for the mountain of paperwork they will require just for pre-approval, which is now the norm. 2 yrs of W-2's, 2 yrs of tax returns, last 3 paystubs, asset sheets & copies of bank/investment statements. going through the process now and it's very time consuming. can't help you on bank recommendations since i'm not in DM



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    Re: Pre-Approval for first time home buyer?

    Well did you go to a lender and get a letter stating what you were approved for before you went to the realtor?



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    Re: Pre-Approval for first time home buyer?

    Quote Originally Posted by chicagoCy View Post
    be prepared for the mountain of paperwork they will require just for pre-approval, which is now the norm. 2 yrs of W-2's, 2 yrs of tax returns, last 3 paystubs, asset sheets & copies of bank/investment statements. going through the process now and it's very time consuming. can't help you on bank recommendations since i'm not in DM
    Yep, I just finished all of that as well. Fortunately we are closing tomorrow so I'm hopeful the end of paperwork is in sight.



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    Re: Pre-Approval for first time home buyer?

    Quote Originally Posted by moneyshot8434 View Post
    Well did you go to a lender and get a letter stating what you were approved for before you went to the realtor?
    It's been the better part of 10 years since I last bought my house, so it was well before all this financial mess.

    But I found a realtor I wanted to work with. She set me up with an internal mortgage agent and they "pre approved" me for around X amount. Shopped for a house using that mark, and shopped for best loan terms at the same time.

    I think you can pretty much count on most mortgage companies having similar max amounts they'll give you given your income and credit history. And if you get pre-approved at X, most companies will find a way to get you to that same price when it comes to purchasing.



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    Re: Pre-Approval for first time home buyer?

    I bought 1st time in Sept. and I went to 3 different banks. Wells Fargo was the biggest hastle but also was willing to give me the best rate. I didn't go with them and instead went through a local bank because Wells Fargo required me to provide more up front than my local bank. If you have a good banker, deal with that person and they will make it as painless as possible.



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    Re: Pre-Approval for first time home buyer?

    Quote Originally Posted by moneyshot8434 View Post
    Well did you go to a lender and get a letter stating what you were approved for before you went to the realtor?

    Nope, I went to the realator first.

    And I'll echo the person that said to be prepared to hand over every record you have......I was ready for the usual stuff (bank statements, etc). But my parents were going to loan me $3000 for part of my down payment. The lender wanted them to turn in their bank statements, etc and my parents weren't comfortable doing that. So I ended up taking money out of mutual funds to cover the down payment. This caused huge concerns even though I only had to take out around $2000 and I had that much in my savings account at the time, but didn't want to drain it.

    So if you think you are going to get money out of any sort of funds, CDs, etc....get it out now. If you are going to get some help from your parents.....get it from them now.



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    Re: Pre-Approval for first time home buyer?

    Quote Originally Posted by jsb View Post
    Nope, I went to the realator first.

    And I'll echo the person that said to be prepared to hand over every record you have......I was ready for the usual stuff (bank statements, etc). But my parents were going to loan me $3000 for part of my down payment. The lender wanted them to turn in their bank statements, etc and my parents weren't comfortable doing that. So I ended up taking money out of mutual funds to cover the down payment. This caused huge concerns even though I only had to take out around $2000 and I had that much in my savings account at the time, but didn't want to drain it.

    So if you think you are going to get money out of any sort of funds, CDs, etc....get it out now. If you are going to get some help from your parents.....get it from them now.
    Yes, stuff like that is best kept to yourself. Don't open yourself up to more scrutiny. Just put mom & dad's help into your savings account and leave it at that.

    Do I feel lucky getting it done way back. I think I showed up with 2 paycheck stubs and that was about it.

    FYI - I went through Countrywide, now Bank of America. I haven't had a single issue with either, but I have no idea how competitive they are.



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    Re: Pre-Approval for first time home buyer?

    So it sounds like the biggest haste is where you get money for the down payment. Sounds like the best thing is to be sure you have the money in just a basic savings account before you go anywhere. We were originally just going to use a CD, but sounds like that is frowned upon.



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    Re: Pre-Approval for first time home buyer?

    FYI...WSJ had an article that said lending is at it's lowest since 1940's. It might be tough to get a loan in you have any debt.



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    Re: Pre-Approval for first time home buyer?

    Quote Originally Posted by moneyshot8434 View Post
    So it sounds like the biggest haste is where you get money for the down payment. Sounds like the best thing is to be sure you have the money in just a basic savings account before you go anywhere. We were originally just going to use a CD, but sounds like that is frowned upon.

    It would be fine, but just annoying. The most annoying thing for me is that I needed 3 months worth of statements for my mutual funds. I couldn't figure out why since the money that was in there was clearly in there at the time. And again, we weren't talking big money. We were talking $550 in one and $720 in the other. If I had to do it again, I just cash out everything and deposit it.



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    Re: Pre-Approval for first time home buyer?

    I got lucky and didn't have to do a down payment and only had to show my last 2 pay stubs, of course this was 6 years ago.



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    Re: Pre-Approval for first time home buyer?

    Bought our first house June of 09. Pre approval no problem, Finding a lender was horrible we had no luck we both had credit scores of 750+ with minimal outstanding debt but my wife is in college and they saw her future student loans as a big thing even though its years away. So if you are looking to buy a house in a rural area like we did (Indianola). Go through the USDA-Rural development they can help you get a loan ours was cheaper than it would be with anyone else and they were extremely nice.


    Occam's Razor means 'With all things being equal , the simplest explanation/answer is normally the right one'


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    Re: Pre-Approval for first time home buyer?

    With pre-approval, it should be an easy process. The getting the actual loan is much more time consuming as there's no commitment - "you can get approved, not have been approved"

    With pre-approval, you can just call any of the banks and they'll sit down with you, run your credit report while you bring W-2, etc and they'll give you pre-approvals. It's been 7 years since I did the process, but it wasn't time consuming. Not sure how things have changed in the process.

    i was told that time that let's say you qualify for 100 (using scale of 1-100) but if your target price is just 70, you can ask the lender to pre-approve you up to only to about 75-80. The objective is to avoid the seller to increase the price because the seller knows that you can afford it. Of course that was during the boom period of housing market. But I don't think we did it that time since it was mainly used by our agent, so he was more comfortable and faster in case we find the house we like, so we could immediately make an offer.


    Last edited by cyclone13; 02-25-2010 at 11:41 AM.

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