Pre-Approval for first time home buyer?

[moneyshot8434]

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.

 

[jsb]

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.

 

[chicagoCy]

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

 

[moneyshot8434]

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

 

[tejasclone]

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.

 

[DaddyMac]

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.

 

[heyguy85]

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.

 

[jsb]

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.

 

[DaddyMac]

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.

 

[moneyshot8434]

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.

 

[2forISU]

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.

 

[jsb]

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.

 

[isufbcurt]

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.

 

[CycloneTony]

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.

 

[cyclone13]

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.

 

[19Cy78]

Sorry, I get frustrated at times, because people need to take better care of their finances, make more and save more.I am affliated with a downtown DSM community credit union that pays 4% in a checking account, but offers 3.99% auto loans. No joke.

Nothing has changed in the way they do business, because they've practiced conservative lending practices, but they still offer the same common sense lending, if it makes sense they do it. They have money to lend and offer great rates on everything home, auto, cards, etc.

Check them out www.premiercu.org

I use to bank with Brenton, loved that bank, this is as close to that small town feel, but in the metro I've found.

 

[JRCampy]

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.

My wife and bought a new house the first half of last year, Wells Fargo was pretty picky about our bank statements. We were not allowed to count any deposits in our checking or savings accounts toward our potential downpayment that they didn't know where they were sourced from. So even if you don't let the bank know up front that your parents are helping you, it may come to the forefront anyway when the mortgage broker asks you to verify the source of the deposit.

Also, there are rules when it comes to your parents "gifting" you money. I don't know the limits, but if they gift over a certain amount you must pay taxes on the gift as it is income. I believe loans from parents are also taxable if there isn't a minimum interest rate applied to the money being borrowed

 

[GoCubsGo]

If you have any type of connection to a local bank or local banker (i.e. from your hometown), my expereince is that will be the way to go. While I was in grad school my wife was tasked with finding us a home loan for the purchase of our first house while I was studying for finals. She made the stops at the usual "big" shops without much luck. After all, we had a lot of student debt and I had not started working yet, so I didn't have any income. She was getting frustrated by the process and it looked like we would need to rent for awhile.

Then I called my local banker, told him we wanted to buy a house, and 15 minutes later we had authority to buy a house of up to $X. Needless to say, my wife was pleased that we could buy a house, but ****** that I was able to accomplish in 15 minutes what she couldn't during a full week!

 

[GeronimusClone]

Sorry, I get frustrated at times, because people need to take better care of their finances, make more and save more.I am affliated with a downtown DSM community credit union that pays 4% in a checking account, but offers 3.99% auto loans. No joke.

Nothing has changed in the way they do business, because they've practiced conservative lending practices, but they still offer the same common sense lending, if it makes sense they do it. They have money to lend and offer great rates on everything home, auto, cards, etc.

Check them out www.premiercu.org

I use to bank with Brenton, loved that bank, this is as close to that small town feel, but in the metro I've found.

Is that all? So simple.

 

[Tedcyclone]

please, its easy... head to wells fargo... not that complicated at all.