Starting to talk to realtors. Pre-approved for mortgage?

**NolaP** · 03-11-2011, 07:30 AM

I think it just helps give them and you an idea of a price range. Pre-approval takes less than a day and you can do it over the phone just by answering some questions. Get referrals from friends and find a mortgage broker, there is no commitment to anything to get pre-approved. Good luck! I am about to buy my first condo as well!

**JuniorTT** · 03-11-2011, 07:34 AM

The pre-approval lets you, your realtor, sellers, and sellers agents know how much how you can afford. They don't want to waste anyone's time looking at houses you can't afford.

I would recommend getting pre-approved with 3 or so different mortgage companies or brokers. Then when the time comes you can quickly lock in with whoever has the best rate/fees.

**bjl584** · 03-11-2011, 07:58 AM

Originally posted by Coronet View Post

Hi all. As I've mentioned in my other threads I'm starting the process of buying my first home this fall. I've spoken casually to a few realtors to get a gist of what's available in the areas I'm looking at, but nothing concrete yet. They asked if I had been pre-approved already. Would I have to get pre-approved for a loan this early? I'm also a bit confused what that means. Is pre-approved just that... being approved but not actually in the process of taking out the loan? If so, how early should I get my pre-approval? I'm considering purchasing a home in June or July of this year.

Thanks all. I always appreciate the feedback.

It just gives the bank and realtors a ballpark idea of your creditworthiness. Most realtors won't deal with you (or deal with you seriously) without preapproval from a lender. It's quick, free, and easy. Most preapprovals last 6 months before they expire. The lender will renew it for you before it expires if you call and tell them to.

**Hector** · 03-11-2011, 08:51 AM

Is there a credit inquire for a pre-approval?

**Coronet** · 03-11-2011, 09:22 AM

Originally posted by Hector View Post

Is there a credit inquire for a pre-approval?

I'm guessing there is.

**Coronet** · 03-11-2011, 09:49 AM

I just tried the pre-approval from one of the banks I'm with (USAA) and they were asking for a $50 "good faith" fee to do the pre-approval process. Is that typical? I didn't go through with it yet.

Also they do check your credit scores Hector. They were asking my permission to do so on the USAA pre-approval ones.

**Hector** · 03-11-2011, 10:38 AM

I bank with USAA too and I like it a lot. I hardly know anything about mortgage, but I didnt like that $50 fees specially after reading from other posters that most lenders do it for free

About credit inquiry, seems like its better not to have any credit inquiry in last two years before one applies for mortgage as borrower will go to 3-4 lenders and each will do a credit inquiry which will bring down credit score little bit.

I am hearing that average down payment is 22-23% these days. It will be interesting to hear OP's experience. Its good that she has enough money saved up for down payment, but I wonder what are the expectations from lenders!!

**thomsoad** · 03-11-2011, 10:40 AM

Originally posted by Coronet View Post

I just tried the pre-approval from one of the banks I'm with (USAA) and they were asking for a $50 "good faith" fee to do the pre-approval process. Is that typical? I didn't go through with it yet.

Also they do check your credit scores Hector. They were asking my permission to do so on the USAA pre-approval ones.

Its not typical but not uncommon either. If I was you I would try a smaller community type bank before the majors. But to be honest here ... if you aint lookin to buy yet... dont be looking for preapprovals. Dings your credit.

But in response to your question. A preapproval is a very good idea cuz it tells the buyer you are credit qualified for the bid you made. Any selling realtor worth anything is just gonna counter offer that you have a preapproval anyways.

On a side note; its sounding like you are getting "house fever". Dont even be thinking about this till you have your 20%. Concentrate on that and only that. Otherwise you are setting yourself up trying to rationalize an interest only ARM mortage cuz you need a home right now.

**Coronet** · 03-11-2011, 01:38 PM

I don't have house fever. I've been planning to buy around this time of my life for 2 years now. I'm fine with my 20% downpayment.

**melissalt** · 03-11-2011, 02:32 PM

Usually a preapproval means you have actually done all the paperwork for the mortgage before you find the house. Going this route means that as soon as you find the house, you just tell the bank and they'll pull a last minute credit check to make sure nothing has changed since you were granted your preapproval, and then you can go ahead with the inspection, appraisal, etc. knowing that you have the loan.

All realtors, and many loan officers will prequalify you, but that isn't official and doesn't mean you would get a loan; it just means that if all is as you say it is, you would be eligible for a certain amount of money from the bank. On the other hand, preapproval means you actually have the loan and are just looking for the house.

Having bought both ways before, having a preapproved mortgage and then finding the house is much less stressful than finding a house then scrambling to provide the bank with all the paperwork it requires, which can be quite a nightmare sometimes (oh, and hoping it doesn't stretch out past your closing/settlement date).

**LuckyRobin** · 03-11-2011, 06:22 PM

June is only three months away. I would definitely get the preapproval done now. And there should be plenty of places that do not charge a fee for this.

**thomsoad** · 03-12-2011, 06:26 AM

Originally posted by Coronet View Post

I don't have house fever. I've been planning to buy around this time of my life for 2 years now. I'm fine with my 20% downpayment.

My apologies then, thought you were saving the 20% right now and looking to buy in the fall? If you are ready to buy now then get the preapproval. FYI: generally preapprovals are only good for 30 days... 60 at the most

**ktmarvels** · 03-12-2011, 08:07 AM

Originally posted by Hector View Post

I bank with USAA too and I like it a lot. I hardly know anything about mortgage, but I didnt like that $50 fees specially after reading from other posters that most lenders do it for free

I also have USAA and their conventional loan has a $50 fee, but then it goes towards the closing costs or something like that so if you actually buy something it goes towards that. However they can refer you to another company that will give you quotes for FHA loans which will give you a pre-approval for free. However, condos are especially tricky with FHA loans which is why they probably had you go the route with the fee.

Oh, and if you have USAA I'd use their Movers Advantage Program. It's like free money if you use the real estate agent they recommend.

**LuckyRobin** · 03-12-2011, 01:05 PM

I was always told it's best to get a pre-approval six months before you were ready to buy so in case it came back denied because of your credit report, it would give you time to fix any errors on your report or pay off a deliquent account you might not have known you had. Then once things were cleaned up, go for pre-approval again closer to when you plan to buy. If your credit report is clean and you know it, then you could wait until a bit closer, but I'd personally want to make extra sure there was nothing that would deny a pre-approval well beforehand.

Starting to talk to realtors. Pre-approved for mortgage?