Fizzle1979

Pre-Approval Encouragement/Opinions

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You look good but keep in mind the 3-4 4-5 rules. 3-4 months worth of house payments sitting in a checking or savings account, and they need to be there for about 4-5 months, prior to the loan closing. If you can show this you are going to have no problem qualifying.

Be very, very careful buying repo's. They generally are worthless. The banks can't just dump them like they used to be able too, so they are now eating attorney fees, management fees, even handyman service fees to bring the property up to a presentable view. Buyers are getting smart. They are doing MLS comparisons on properties and finding out that the reason the property went into FC is that the bank overloaned in the first place.

The banks insurance will cover up them for about 20% of the loss on the property. So for example a property repoed at $400,000. The bank can only afford to sell the property for $320,000. If the market drops below that number its a crap shoot whether the bank is willing to dump it. There going to have fees in the repo, court, legal, maintenance, etc....

One thing to look for in repos is to ask questions. The first question is how much property is the bank holding on too that is FC. Remember the more property the banks is sitting on the less attractive there loan rates are from the feds and private sector investors. Its in the banks interest to get rid of property, to boost there liquid assist margins. So if you find a repo and that bank thats holding the paper has an excessive amount of repos in there possesion you have a better chance of cutting a great deal. It takes time and patience to get these deals. There out there, you just have to do your homework to find them.

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I'm bringing this thread back from the dead because I've started thinking about buying a house again.

First, I'm not going to use 401K money.

Second, I've saved upa little money but still not enough to put 5% down.

Third, I live in an area were the housing market is doing exactly opposite from everywhere else. Houses are on the market for a day or two before the seller gets an offer.

Fourth, We have some kind of bond where the City/County gives like 3% of the sale price to the buyer to help with closing. I'm still gathering details on this bond. I was told only certain lenders are doing this for buyers. So national lenders like CountyWide, etc wouldn't do this bond because they don't know about it I guess?

Fifth, I don't plan on buying a house over 125K. So this figures like 350K+ you folks talk about don't apply to me. That's INSANE!

Sixth, I'm very picky about my credit report. I don't want 1000 inquiries on it. Can someone advise me how to get pre approved without having this happen?

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Sixth, I'm very picky about my credit report. I don't want 1000 inquiries on it. Can someone advise me how to get pre approved without having this happen?
Yes. PM one of the fine mortgage professionals in this forum. They don't solicit business but other members have dealt with at least one of them and reported back favorably. Charles (Firstsource?) would be a good place to start. If you had 20% down and 700 scores, major banks may all be competing with superprime rates and you could walk in and expect prime with little fees. But with less than 5% down in this tight credit market & possibly DPA involved, a great broker will be valuable by getting you into a safe and affordable loan that you'll be pre-approved for.

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Hey Fizzle, is going FHA an option for you? I went FHA, stuck with one broker, had only 5-6 inquiries max on my report from mortgage inquir. and got a decent rate at 6.75 fixed/30 years. I believe FHA only requires 3% downpayment.

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...only 5-6 inquiries max on my report from mortgage inquir. and got a decent rate at 6.75 fixed/30 years. I believe FHA only requires 3% downpayment.
That's a lot. MY broker only did one.

And when my wife and I purchased three years ago, our bank only did one. I'd be seriously annoyed if any broker did multiple pulls.

And FHA rates are pretty decent right now. Probably around 6%. I locked at 6.375% a year ago when rates were slightly higher and I only put down 3%. But I think I paid slightly more because it was multi-family.

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Hey Fizzle, is going FHA an option for you? I went FHA, stuck with one broker, had only 5-6 inquiries max on my report from mortgage inquir. and got a decent rate at 6.75 fixed/30 years. I believe FHA only requires 3% downpayment.

Here's the deal. I have no clue about FHA loans. But to me, I would think a lender would be able to see my employment history is nine years with same employer, see my income, ytd pay check stub and last two years income tax returns and I'll bring my credit reports with me and to ME they should be able to give me a ball park of how much they will approve me for. I just don't understand why they HAVE to have my credit run. And if they run it...why cant the lenders see it, why does EACH lender have to run it. Just over my head I guess.

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One pull as far as I know. Then they submit to lender.

Before you put in an offer, many realtors want a pre-approval. They don't want their time wasted. A pre-approval requires that the broker / lender has accurate info so they don't sign their name to bad info. Besdies, until you get a pre-approval, you may not be sure you are shopping in the right neighborhood. Maybe you know, but some out there are clueless about how much they can afford.

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What I did was contact alot of people and gave them the same info as you just gave me and if they want your business, they will let you know what you are approved for. You can also get a pretty good estimate of what you would be approved for at any online mortgage site. When I was shopping around, they were pretty dead on.

I'm going home for the day but I will write more on this tomorrow or tonight! :)

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In today's lending environment every one is being more cautious. To have an truly accurate loan approval, a lender or broker is going to want to run your situation through an Automated Underwriting System. To do that, they are going to have to pull your credit.

It is possible to look at someone's credit and other documents and give you a good idea that you can fit/get approved for a program or not, but it is just a good idea.

On the bright side, the bureaus know that you may want to do some shopping around before you get your loan, so all credit pulls for an industry (Autos, houses, etc) only hurt your credit one for all inquiries made in a 13 day period. (the books say 14 days, but does not hurt to be on the safe side)

Charles

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I know that some lenders do charge an application fee up front, I don't and don't know for sure but assume that the other Loan Officers that are on this site also don't charge.

Charles

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Would I have to pay a lender to get me a pre approval?

I wouldn't. :) I'm no mortgage lender or anything like that, but from what you have posted in this thread, you should have no trouble getting a mortgage.

When I purchased my home, (back in March 2007), I still had my two medical collections on my credit and my credit was nowhere near as good as yours Fizz. The main things that helped me I think is that I didn't want a high priced home and that I had worked at the same job for almost 6 years now. I was approved for more than I actually purchased. :)

Good luck!

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I think that the reason he is concerned is that things have changed so radically since you financed your home. There is virtually no sub-prime available now, and the intermediate programs, called ALT-A or A-, have very tight restrictions.

That being said there are new programs being announced again to help the people that have not been able to get financing for a while. While the guidelines are more logical now, you can now get stated income/stated asset loans.

FannieMae just announced major changes to their guidelines for jumbo loans (those over 417K) which should help people with loans that size get out of their ARMS.

So back to the basics type financing. If it is a logical loan, and the borrower has shown that they can repay the loan, then those will happen.

Charles

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I think that the reason he is concerned is that things have changed so radically since you financed your home. There is virtually no sub-prime available now, and the intermediate programs, called ALT-A or A-, have very tight restrictions.

Charles

I understand that, I was just comparing my credit to what I know about his from this post. :) I think FHA would be a good option for Fizzle, with the downpayment amount he has available. Do you think so, based on what he has written here in this post?

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Yes, that pretty much all I do now. From what he has said he should have no problem. I am learning some interesting quirks about FHA. Generally "no late payments in last 12 months" is the rule. I got an approval for someone that has a late that is only 2 months old. The reason is that they have long/well established credit and 720+ scores.

Charles

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well I talked to Cap One since they are my bank. Basically the cap one guy said if my scores where 800, I still would have a hard time finding a lender and having the under writer approve my loan because I have very little down payment. So back to saving money!

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well I talked to Cap One since they are my bank. Basically the cap one guy said if my scores where 800, I still would have a hard time finding a lender and having the under writer approve my loan because I have very little down payment. So back to saving money!

Wow. Things are different there in TX. One of my co-workers just got approved for a loan with essentially zero down (I think she's putting up $500). Granted she's buying a 80K house. She couldn't afford a house around here. 80K would get you literally a shell. I'm looking at houses at about twice that much and hopefully I'll have 9K saved by the time I'm getting it.

Anyway, all of her scores are in the 700s, but nowhere near 800.

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Fizzle, maybe a broker would have a different answer for you. Some banks are very tight and others are more wlling to deal. I think Charles is spot on- the loan just has to make sense. The days of banks throwing themselves are over. But if you have decent credit and the loan makes sense, my guess is you'll find a lender. But you'll need to pay PMI.

Mag- I am a real estate browsing junkie ;). There are still some decent places under $180 reasonably close to Philly or even in the city. Just got to sort through the junk and play hardball with sellers who are generally in denial about the real value of their homes. The last 5 years have conditioned people that the baseline sales price is at a bare minimum of 110% the price they paid. Some of them are asking the world but are likely to take any reasonable offer.

Where you lookin'? Shoot me a PM if you'd like. I was just looking at NEW 2br/2bath condos up 422 a bit (Royersford) that are priced at 159-179. Thinking about picking one up for a rental but they would make great residences as well, as long as you are open to condos and open to the area.

They are also building 2000 condos next to the KoP mall, but I heard they will be priced at +$500k. OUCH.

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Mag- I am a real estate browsing junkie ;). There are still some decent places under $180 reasonably close to Philly or even in the city. Just got to sort through the junk and play hardball with sellers who are generally in denial about the real value of their homes. The last 5 years have conditioned people that the baseline sales price is at a bare minimum of 110% the price they paid. Some of them are asking the world but are likely to take any reasonable offer.

Where you lookin'? Shoot me a PM if you'd like. I was just looking at NEW 2br/2bath condos up 422 a bit (Royersford) that are priced at 159-179. Thinking about picking one up for a rental but they would make great residences as well, as long as you are open to condos and open to the area.

They are also building 2000 condos next to the KoP mall, but I heard they will be priced at +$500k. OUCH.

Argh!! 500K!! I guess that's kind of normal for KOP. I wouldn't want to live in Royerford. Driving 422 everyday, yikes!! That road gets like a parking lot.

I'm going to PM you.

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A lot of the new contruction is a lot more expensive than the old stuff. The new 2br and 3br townhomes going up all over East Falls are large (2500 square feet), but they are starting at $629k. It is unreal. I don't know who the h*ll has cash like that to buy a townhome. Go 30 miles from the city and you can get a 4000 square foot 5bd/4bath home on an acre for that much cash. :roll:

The condos in KoP will be integrated into an enormous new outdoor "town square" type of high end retail center. They are selling the concept as the new live/work/shop in one location theme. $500k to live above a Banana Republic? Not for me.

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A lot of the new contruction is a lot more expensive than the old stuff. The new 2br and 3br townhomes going up all over East Falls are large (2500 square feet), but they are starting at $629k. It is unreal. I don't know who the h*ll has cash like that to buy a townhome. Go 30 miles from the city and you can get a 4000 square foot 5bd/4bath home on an acre for that much cash. :roll:

The condos in KoP will be integrated into an enormous new outdoor "town square" type of high end retail center. They are selling the concept as the new live/work/shop in one location theme. $500k to live above a Banana Republic? Not for me.

Yeah, you could find a large home like you describe out in the townships around West Chester or Downingtown.

They must think they can sell the places in KOP to someone. I guess if you came from NYC those prices would seem reasonable.

The one place I could never get was that apartment complex between Henderson Road and 202 in KOP. They're nothing special, the rents are high and they have to be noisy with 202 right there, but they never seem to have any trouble renting them.

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That's a lot. MY broker only did one.

And when my wife and I purchased three years ago, our bank only did one. I'd be seriously annoyed if any broker did multiple pulls.

And FHA rates are pretty decent right now. Probably around 6%. I locked at 6.375% a year ago when rates were slightly higher and I only put down 3%. But I think I paid slightly more because it was multi-family.

Hmm really? I shopped around and thought I did good with the inquiries. 6.375? Better than my 6.75.

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Wow. Things are different there in TX. One of my co-workers just got approved for a loan with essentially zero down (I think she's putting up $500). Granted she's buying a 80K house. She couldn't afford a house around here. 80K would get you literally a shell. I'm looking at houses at about twice that much and hopefully I'll have 9K saved by the time I'm getting it.

Anyway, all of her scores are in the 700s, but nowhere near 800.

I'm glad I'm in Texas then. :lol: For my 72k, I got me a little 1350 sq. ft 3bed/1 bath on almost half an acre. Granted the home was built in 61 and it is older but I love it. :)

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well I talked to Cap One since they are my bank. Basically the cap one guy said if my scores where 800, I still would have a hard time finding a lender and having the under writer approve my loan because I have very little down payment. So back to saving money!

That sucks Fizzle, sorry to hear that. I don't think they are your only option though and I still think if you are ready, that you could be approved, even with a small downpayment. I was reading back through this thread and one posted posted about how important it is to have some money saved up when you first move in because of new expenses. That is completely true! When I moved in to my home I needed a frig, new curtains, yard tools, etc. Trust me, it adds up so fast. So even if you went with FHA and did the 3% downpayment thing, there are still other costs that kinda sneak up on you. For example my house has these beautiful blinds that were actually a selling point to me. Turns out at night----these blinds are pretty dang see-through. So I had to go buy new curtains/blinds for all my windows because I don't want folks peeking in on me! :lol::lol:

Good luck!

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