Financing in 53226>Question Details

Mary, Home Buyer in 53226

When do you need to show proof of your down payment & savings? As early as when you are getting pre-qualified, or when you apply to get

Asked by Mary, 53226 Mon Apr 12, 2010

pre-approved? My husband and I are hoping to buy a house next spring and close around April (2011). So that means we are planning to start looking for houses probably in Jan. But by April, due to the passage of a few more months, we will have more saved than we will in Jan.

We are planning on getting pre-approved before we start house shopping, which would be in January. So I'm wondering if our loan will be determined by what we have in January or if it will be processed again with current information at closing?

I'm expecting the difference between Jan & April savings to be an increase of about $6,500.00

0 votes Share Flag Financing in 53226

Help the community by answering this question:

Answers

9
I'd like to point out a bit of questionable advice:
"have your Realtor [R] give you references [for a lender] to assure you are not going to a company that is not all that great"
One thing the last few years has taught us is that the real estate industry does not protect prospective buyers from bad lenders and/or bad loan products.
1 vote Thank Flag Link Wed Apr 28, 2010
Donna and Dick, I am not sure who would put their name on a pre-approval letter without running credit, I certainly would not. However Mary, it would definitely be a good idea to have your credit run now so that you know where you stand, and if it is realistic to get a loan next year. If your credit is borderline, the loan officer can hopefully be able to advise you what you can do, or should not do, to make sure your scores increase, and certainly don't drop. The most important thing, do not close any accounts, or open any accounts. If you really need a new car, you won't be able to do anything about it, but keep in mind that a big payment will have a big affect on the mortgage payment you can qualify for. Same with any other purchases. Even if it is something that requires no payment for 12 months, you still will be hit with the debt.
As far as assets go, the amount you need to close has to be in your accounts before your application, unless it is money that is being gifted to you. If you have money in 401k's that you can withdraw, and then pay back after closing when you have saved up that extra money, you are fine, but a bank won't underwrite based on the money you will save between contract and closing.
1 vote Thank Flag Link Mon Apr 12, 2010
Won't the underwriter conditionally approve the loan but add a prior to funding condition that assets for down payment must be present 10 days prior to closing?
Flag Sun Sep 15, 2013
Cliff,

I'm sorry to say that in part you are correct. There have been many dishonest people involved in the housing crisis. And if you are a victim of that, I want to take a moment to apologize for them, since I'm reasonably sure you will not get it from the actual perpetrators. Keep in mind that much of the housing crisis started in a place where agents and lenders really had little to no control. If you want to blame someone, blame the mandates that gave anyone cart blanche' to obtain a mortgage as long as they were living, breathing and stood upright.

When the government said every American has a right to own a home and put into place the following, down we went:

To see the different types of loans that the lenders were required to offer, check out my Blog Post. I am going there to enter this information as I think it might help clear up many of the comments and questions we continue to get on this subject.

Linda



That said, please stay with me a moment. When you go to a bad doctor, you don't write them off as all bad or any professional for that matter.

But............please don't put all of us in the basket. Pull out the few bad apples instead.

I sat in closings and begged my clients not to go through with the mortgage terms that were presented to them on the day of closing after being told, "We have a slight problem. We couldn't get the loan we told you about, but the good news is that we can still close." I was shocked and a bit nieve. But I want you to know that the MAJORITY of agents and lenders that I have worked with are honest and do very much care about their clients.

It might help to know that as a direct result of some of the actions of a few, there have been several laws put into place to once again protect the consumer. And I for one am getting really weary from having to jump through all the hoops and have 3 inch thick files because of those actions.

And lastly, let me point out that when an agent offers referrals to a client, their reputation is on the line, so we don't do it lightly. If you have a trusted agent, chances are you'll have a trusted lender. And "Realtors" as you put it are held to a much higher standard than an agent. So................next time you are in need of service, whether it be to buy or to sell, find yourself a Realtor® and check them out thorougly before signing anything!!!
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Wed Apr 28, 2010
Mary,

I think Robin has shared some excellent advice with you.

I would like to add that I think people confuse pre-qualification with pre-approval all the time. And I, myself, have met with buyers whom have had a paper that stated it was a "pre-approval" and found out that there was no credit check done let alone any other information gathering.

?????

Linda
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Mon Apr 12, 2010
Hi Mary,

As an agent who works with many first-time homebuyers, I'd like to clarify a few things for you. $6,500 can be huge or not so huge depending on the price range of the home you are looking for. If you are in the $100-$150,000 range it could mean the difference of getting the home or not.

And I think Louwu has a valid point when he advises against getting the pre-approval due to a second hit on your credit. However, since it is over nine months from now, I'm not sure that it would have as great of an impact as finding out that you have items on your credit history when you finally make your move forward. You will want to engage a lender that you know and trust (ask other friends and relatives or co-workers if you don't know of one yourself). Ask that lender his opinion. Getting a pre-qual with a credit check will give you a very good idea of what you will be able to afford. (Note: Never go as high as the lender tells you. You do not want your first home to become a burden. You need to have extra money for things in and around your home and unexpected expenses. You might have to change your lifestyle a little, as most first-time homebuyers do, but you don't want to live just for your home.) And finally, you will want to keep all payments on time from now until the time you decide to go house hunting.

Some buyers are actually getting pre-committment (with a few stipulations of course) as this is the best you can have searching for a home. It holds a lot of clout with sellers. It means you have gone through the whole process with the exception of finding a home. And since you have the time to do it, that is what I would suggest.

Hope this was helpfull.
Linda
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Mon Apr 12, 2010
You are starting right. A new pre-approval may be required if you it is more than 60-90 days old. But, since it only takes a few minutes for a lender to do, it is not a big deal.

You are also smart to build up your savings.

When you find a property, you will meet with a mortgage lender (have your Realtor [R] give you references to assure you are not going to a company that is not all that great), pay for an appraisal and credit report up front, as appraisers get paid immediately through the lender. You will also need to take along certain documents to prove your net worth.

JUST MAKE SURE THAT THEY RUN YOUR CREDIT REPORT WHEN THE PRE-APPROVAL IS DONE, SINCE SOME LENDERS DO NOT, AND THEN YOUR PRE-APPROVAL IS WORTHLESS.

I ALSO WOULD REQUEST THAT THEY NOTE THIS FACTOR IN THE LETTER OF PRE-APPROVAL.

As a Realtor (R) in SE WI. I will not present a listing, and for luxury homes, no showing without this in hand.
dbell@att.net Realty Results, Pewaukee, WI.
0 votes Thank Flag Link Mon Apr 12, 2010
You are starting right. A new pre-approval may be required if you it is more than 60-90 days old. But, since it only takes a few minutes for a lender to do, it is not a big deal.

You are also smart to build up your savings.

When you find a property, you will meet with a mortgage lender (have your Realtor [R] give you references to assure you are not going to a company that is not all that great), pay for an appraisal and credit report up front, as appraisers get paid immediately through the lender. You will also need to take along certain documents to prove your net worth.

JUST MAKE SURE THAT THEY RUN YOUR CREDIT REPORT WHEN THE PRE-APPROVAL IS DONE, SINCE SOME LENDERS DO NOT, AND THEN YOUR PRE-APPROVAL IS WORTHLESS.

I ALSO WOULD REQUEST THAT THEY NOTE THIS FACTOR IN THE LETTER OF PRE-APPROVAL.

As a Realtor (R) in SE WI. I will not present a listing, and for luxury homes, no showing without this in hand.
dbell@att.net Realty Results, Pewaukee, WI.
0 votes Thank Flag Link Mon Apr 12, 2010
Mary,

your preapproval will be rather worthless in a year if you get preapproved now (credit checks expire for lenders within 60 days so that means you'll have to get preapproved again in december...why take two hits to your credit?). I'd suggest waiting until closer to january before getting preapproved OR if you don't know how much you can afford then i'd suggest getting pre-qualified. You'll be surprised at how little you will be pre-qualified for. Just remember that the preapproval will be rather worthless come january.

also, your little saving idea is moot. when you get your loan, lenders will always request the previous two months in bank statements or a verification of deposit. in other words, if you get preapproved for 400k now but you don't have the assets to support 400k in january, then you won't get your 400k target no matter how much you argue.

To summarize, your loan will be determined by what you have in january and not now.

Good luck.


Cheers,


Lou
0 votes Thank Flag Link Mon Apr 12, 2010
Based on what you stated in your question- You will probably want to share this information with the Lender when you initially go to get pre-approved. They will base your initial preapproval on what you have at that time- but of course can make adjustments when the actual time comes and you have made a decision on writing an offer and planning the closing.

Another thing to keep in mind as you move towards your house purchase is to watch that you don't charge an excessive amount on credit cards, take out any large loans or open up new credit card accounts. These are all factors that could affect your credit scores. And we all know that Credit Scores are now one of the most important factors in getting a Mortgage.
All the Best to You!!
Web Reference: http://GoPackerUp.com
0 votes Thank Flag Link Mon Apr 12, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer