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pre qual vs actual loan


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I have been pre approved for a home loan ,, yippy or is it just getting

up high hopes ?

I am new to this area and a new employee where I work ( 2 months )

I am getting my past tax returns together , althou they do not show that I earned alot of money

the loan payment on the property I am looking at would be in the 300 range per month . I make apx at this time 1200 per month

when I was pre approved at the bank I was told I had a good credit score of 675

and that i would be able to get a loan in the 4.25 range

so my question is ..

will the lack of the time I have in this state and on this job kill any chances of getting a home loan

if it makes a diffrence the house I am looking at is qualifed for a homepath mortgage with 3.5 % down , but I am able to pay 10% down

if I am ready to make an offer to pay the asking price

dose the realtor help me in the process of getting the actually loan?

yes , first time buyer , but not a kid just starting out more

wanting to have something paid for before I retire

thanks in advance for any help and info you could provide

i have the letter from the bank stating the amount money they would lend me and the house is in this range

edit to add this letter is from BOA and it was generated after a 5 min phone call from with in branch that did not have an actuall mortgage officer

Edited by nchomebuyer
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Congratulations on getting a new home! xdancex

It sounds like you are getting your information together nicely. :twothumbsup:

Putting down 10% on the purchase price is a good thing when the loan you are getting only requires 3.5% down. It is called a compensating factor and is a big help in your qualification process. :mrgreen: Do you have funds for your closing costs and pre-paid expenses yet or are you planning to have the seller contribute toward your closing costs and pre-paids?

Some Realtors know financing and can help you through the process, but not all Realtors. That is something that is individual to the Realtor and their personal selling style/experience. In general, your loan officer is the contact person regarding your loan and the Realtor finds you the property and coordinates the purchase with your lender, yourself and the seller/seller's agent.

Is your pre-approval with a mortgage banker or with a direct lender? This may make a larger difference for you as mortgage bankers fund the loan and have many loan programs and a direct lender is more limited in their loan program offerings.

If you have a specific house in mind now, make sure your loan officer provides a closing costs worksheet for you before you make an offer so you have a good idea of loan costs for that specific property before you make an offer. The closing costs worksheet is all the same info as the Good Faith Estimate but doesn't have the timeframes imposed by law that the GFE has so loan officers are more prone to provide the information up front. The GFE has to be provided within 3 business days of your actual official application.

Ok, now for my soap box *phone pre-qualifications* in general with a large big box lender like BOA/Quicken etc are not very good. In order to get a true picture of your financial condition for purchase, the loan officer has to have your documents. This includes w-2's, tax returns (2 yrs), paystubs, bank statements at a minimum. Without that information, the bank is just giving you a 'credit approval' based on your credit report/score alone.

You will save a lot of heartache if you go to an actual lender now with your documents. You can then get a full pre-approval. If there are issues, you can correct the issues before you find the property. If you want a good referral for your area, speak to your experienced Realtor. *off soap box*

As a note: in my area, most of the experienced Realtors are very, very, very leery of BOA's PQ's because a huge percentage of them never close. :-( BTW, it is not because of the borrower that the deals don't close. It is because BOA didn't provide the right kind of PQ and mishandled the loan right from the beginning. Don't get discouraged. Get the right lender at the start and you won't have those issues.

Edited by Denita
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first off thank you for such a nice easy to read reply and your honesty

I could not see where a five min phone call could be that solid of an agreement to lend me the money that easily

i will speak with an experienced realtor in my area tomorrow after work to find out who they would recommend I go to for a loan on this property

and perhaps they can also give me a tour of the house , as of yet I have only seen it form the outside and the photos online

the house is in foreclosure I dont know if that helps or hurts to get a loan

from what I have read on line today . I am doing well with my credit score

but my lack of time in the area will hurt me and it could be I did not make enough last year ..

i am assuming thats why they ask for past tax returns

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You are right, they ask fo rthe documents so they have a full picture of your financials. If you are in the same line of work, you can overcome the income issue that you may or may not have had last year. It's not really possible to know without seeing the tax returns and current paystubs. Your down payment really is a huge help. Don't under estimate how much a down payment helps you.

Good luck to you. If you have questions, come back and ask. Make sure you get an experienced Realtor to help you.

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i tryed sending you a PM but I am not allowed to do to lack of post

thanks for your time and help .

I understand the higher the down payment the lower the monthly note will be but how else dose it help the loan application?

one more question.

what is the average or general time frame between making an offer and getting approved or denied for the loan

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I think you have to have 20 posts or so for a pm. Don't worry, you will have them before you know it! :)

If you go to a loan officer with your full set of docs, you will know within an hour or two (at the most) for a full pre-approval. The catch is you need a lender that is a mortgage banker (funds their own loans) or a direct lender. And you need an experienced LO (loan officer). An experienced loan officer knows what to look for in the way of ratios and documentation. Your loan still needs to go through the underwriting process, but that is a necessary formality. The process can be as short as a couple of weeks (application to processing to underwriting) or as long as 30 to 40 days depending upon the lender. Most of the time from contract to closing you are looking at 30 days to 45 days.

If you go to a retail type bank (like BOA) the loan officers there are really just application takers and they don't know what the underwriting standards are until the loan is actually submitted to underwriting. That means it takes them 20 to 30 days to have a real decision. That is the disadvantage of going to a retail bank without an actual loan officer.

If you have additional funds for a larger down payment, you are seen as a smaller risk than someone that has the minimum down payment. You have shown you have the ability to save by having more money to put down. Also, with more down it ought to reduce your MI (mortgage insurance) because you are less risky. (FHA reduces the MI if you put down 5% or more of the purchase price rather than 3.5%).

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You are right...a homepath loan doesn't require MI. That's a good thing for you - it will save you money monthly. The mortage insurance only protects the lender - it does not protect the buyer.

Definately consider a Homepath loan. You need a lender that does them - most mortgage bankers do, but you will want to ask to make sure.

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