Financing in Lawrence>Question Details

Ashley M., Home Buyer in Phoenix, AZ

Is it better to find a house, then get pre-approved, or the other way around?

Asked by Ashley M., Phoenix, AZ Tue May 6, 2008

My boyfriend and I are trying to buy a multi-family in Lawrence ( really like this one at 46 Crescent St), but I'm not sure if we should get pre-approved before finding a home, or find a home, and then asl the bank for the exact amount? Both of our credit scores are below 600, so I'm not even sure if we can get approved. We are looking to spend around $100,000.

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Great Question!!!. As an Agent I would prefer to show you properties after you have been qualified. I would not want to have you "fall in love" with a house only for you to find out you can't qualify for it. It is in my professional opinion best to know what price range you qualify for with a mortgage company and what payment you are comfortable with. Aurora Colorado Susan
0 votes Thank Flag Link Tue May 6, 2008
Get a letter of pre-approval from a reputable lender. For a couple of reasons:
1. You know what price range to look in.
2. Many sellers will not even show their home to a buyer who they feel is not serious.
3. Most realtors will not work with you until you are pre approved.
4. When you find the property you want to buy, you will be able to move quickly to make your offer.
0 votes Thank Flag Link Tue May 13, 2008
It's a 2-family house that's about 7300 sq. ft. In Lawrence, MA (where the house is) houses are going for cheap because many people fell prey to ARM loans. We have been paying off our debt for the last six months, so maybe our scores have gone up (we were scored back in December). Thanks everyone for your input!
0 votes Thank Flag Link Wed May 7, 2008
HI Ashley.
How big is this house for $100 K? Here in New York our average studio goes for well over $400k which is scary.
Sorry, now back to your question. My advice to you, and this is something that everyone in my firm stresses all the time including our mortgage brokers is to pre-qualify (Not Pre Approved ) our buyers before you take them out shopping. Last thing you want to do Ashley is go put an offer on a home which you may not be able to afford. Go speak to a lender, a bank or a mortgage broker, make sure you are honest with all of your financials. They will run your credit, check all of your financials and tell you exactly which type of mortgage you will be able to recieve/afford and this will help you go out shoppoing with all the confidence that you need.
Also a suggestion to bring up your credit score is to pay off your debt before you try to get a mortgage.

Best of luck to you and your boyfriend.
0 votes Thank Flag Link Tue May 6, 2008
Hi Ashley,
I would recommend to get pre-approved with a bank or mortgage lender before starting your new home search. You will be able to determine how much you comfortably can afford on a monthy basis and many times, you will also get some helpful tips to raise your credit to prepare you in making this large purchase very soon.
0 votes Thank Flag Link Tue May 6, 2008
I think you've got four great answers. I just want to add that you get your pre-approval from a reputable lender. Ask several people you trust who they use for their mortgage lending and then interview several of them.

When meeting with the lender, make certain you are completely accurate with your employment and income information.

Good Luck!
0 votes Thank Flag Link Tue May 6, 2008
Ashley,
Generally we will always say to get pre-approved first. This way you know what you can afford and then you know where to look for a home. All my buyers have to be pre-approved anyway before we submit any offers so why prolong the process. If you are serious about buying a home then get your letter. If you do not qualify there are lenders out there that will help you get on the track of improving your credit and some will even get you on a timeframe of if you stick to their plan they can get you approved in so many months.
0 votes Thank Flag Link Tue May 6, 2008
It is best to be pre approved by a reputable lender prior to beginning the house hunting process so that you are prepared to make an offer when you find that perfect home! It will put you in a stronger position with the seller to provide loan pre approval along with you offer.
0 votes Thank Flag Link Tue May 6, 2008
I would suggest getting pre-approved first before finding a home of your choice. It will remove any doubts about what you can or can not afford. It will also provide you a starting point for your search. You don't want to waste your time viewing homes that are not in your price range.
0 votes Thank Flag Link Tue May 6, 2008
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