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Susan, Home Buyer in 10801

pre-approval loan question

Asked by Susan, 10801 Mon Aug 27, 2007

We looking to buy a co-op or condo, but we aren't in any rush since we like the place we're renting. Should we get pre-approved for a loan? Does pre-approval only last for a certain time? Will sellers agents take us more seriously? We're in the Westchester, NY area. Thanks!

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IMAO, the thumbs downer was probably neither a regular poster or the questioner. I think it was probably a couple of cranks or a single crank with two identities, who was thumbing indiscriminately. I saw no posting that deserved a thumbs down by anyone in this thread. -
3 votes Thank Flag Link Tue Aug 28, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
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First I don't understand all of the thumbs down. They are sensible responses. 2nd, at the risk of being thumbed down....I would recommend that you have a pre-approval letter. Sellers and their agents wil take you more seriously. If you are in no rush to buy, I would not be in a rush to get your pre-approval letter. I would spend time researching areas that you think you would like to be in. Compare costs and other factors that are important to you. When you have narrowed your search and are ready to start previewing properties as a prospective buyer, I would get the pre-approval letter. I would during the time you are researching the area, also research lenders and find one that is a great fit for you. Good luck to you! I hope you are finding the answers you need. Carrie
Web Reference: http://carriecrowell.com
3 votes Thank Flag Link Tue Aug 28, 2007
Pre-approval is definitely a good thing as sellers will have more confidence in your buying ability. Pre-approval means that a lender has approved you based on a loan application that was submitted to the lender. The mere fact that you submitted a loan application does not mean that you have to get a loan. Pre-approvals have a limited shelve life. How long a pre-approval will be good will depend on how much the mortgage rates change. I would say at this time, a pre-approval letter would probably be good for about 3 months. Once it's older than that, you should ask your loan agent to reissue it. Although you are not in a rush, I would not even start looking without having the pre-approval. When you find a place, you are ready to go. Have fun house hunting.
Web Reference: http://www.go2kw.com
3 votes Thank Flag Link Mon Aug 27, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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Absolutely! Even those with very good credit can sometimes increase their credit score slightly and gain advantage in better terms or loan packages.

You will approach your house hunting more confidently, and be seen as more serious by both a buyers agent or sellers agent. You will make offers and approach negotiations with more confidence. Sellers will view you favorably.

It's a win-win for all. Good Luck to you.
3 votes Thank Flag Link Mon Aug 27, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
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Ute,

First, unless a buyer goes “credit crazy” and has their credit pulled by several sources, mortgage or otherwise, 2 mortgage credit pulls alone will NOT adversely affect their credit score.

Second, if you read my entire answer, I clearly said that is what’s going on in MY market. Could be different in yours and both of ours could be different than every other agent on here…. In my market, that’s what we’re doing because this is a new day in the mortgage industry and no one wants to get a day or two from closing and “poof” have no loan program. No loan = no sale for the sellers = no new house for the buyers = no paycheck for the rest of us. You’d better believe we’re being cautious! Buyers, sellers, and agents alike.

Third, my information comes straight from the horse’s mouth; we are learning these things from the local branch of a national lender, and our in-house lender backs this process.

You know, it’s entirely possible that I, most realtors in my area, and national lenders are way off base about the whole thing, but, then, you think a pre-approval letter, in this mortgage climate, is good for 3 months….
2 votes Thank Flag Link Tue Aug 28, 2007
Joseph,

The real estate market is in a very different environment right now. Gone are the days that a pre-approval letter is good for months and buyers were in a “better” position with one. The mortgage crisis has created a climate where not only should you have one, you must have two! And a pre-approval letter that is more than a week old is almost worthless today. The reason is that mortgage companies are cutting loan programs left and right and even people with good credit are finding that the loan they got pre-approved for a couple of weeks ago is no longer available. Whether they qualify for another program will mostly depend on if they are no-doc or low-doc; if that is the only way they previously qualified to go, no more mortgage loan for them!

In my market we are telling our buyers to not only get pre-approved, but get pre-approved through two different reputable lenders, and we are advising our sellers to request that the buyer be double pre-approved and to ask questions to find out what and how many hoops the buyer needs to jump through to actually make it to the closing table BEFORE accepting an offer.

It is a crazy mortgage climate we are in right now, but still very much a buyer’s market in much of the country. If you take care of your stuff (your hoops) on the front end, get pre-approved through two reputable lenders, and start looking, selling agents will take you very seriously and you will have a strong position to bargain for an even better deal.

Happy hunting! ~Kathleen
2 votes Thank Flag Link Tue Aug 28, 2007
Well... I really didn't think my answer was a bad answer but someone gave me a thumbs down. Actually I thought it wa pretty good. And judging from the ditto on Realty Worlds answer I suppose that is where the thumbs down came from. But I was the first answer so neener... neener... neener.
2 votes Thank Flag Link Tue Aug 28, 2007
Joseph.....

By all means get pre-approved so you know exactly where you are financially and seller and ther Realtors will know you mean business. When you submit you offer the Realtor will require your preapproval with the offer upon presentation. Offer that come in without preapproval are not take very serious. Good luck.
Web Reference: http://pamwinterbauer.com
2 votes Thank Flag Link Mon Aug 27, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
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It is always a good idea to hava a pre-approval letter. It will put you in a much better standing with the seller, along with bargaining power. A pre-approval letter is normally good for about 2-3 months.
2 votes Thank Flag Link Mon Aug 27, 2007
Absolutely get pre-approved and get your loan in place. You'll be in a much better bargaining position with loan approval in place and all of your ducks in a row when you make your offer.

Ed
2 votes Thank Flag Link Mon Aug 27, 2007
Hi Joseph:
Pre-approval for a loan should be sought once you have all your ducks in a row. Are you ready to start looking in earnest? If you are just testing the waters you are wasting your time.

Usually, if a lender pre-approves you - they will "lock you in" on an interest rate for a specific amount of time. Although this isn't in all cases - sometimes they just hand you a letter and say - yup, you're preapproved - this doesn't usually mean anything until the "lock in" phase.

So, wait until you are ready - then by all means get pre approved and get cracking!
1 vote Thank Flag Link Thu Aug 30, 2007
Hi Carrie. Thanks for getting us back on track. I don't always understand the thumbs down either, but it comes with the territory. I think I will no longer address any of the responders and just focus on answering the question. People can throw punches at me all they want. I just won't punch back. It's not worth my time.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Tue Aug 28, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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Kathleen. While I agree that we are in an unpredictable mortgage market right now, I am not sure that buyers should necessarily be pre-approved with two separate lenders. To get pre-approved each lender will want to pull their credit and that can potentially affect the buyer's credit score. We do advise buyers of the need to think about a backup, but we don't tell them to get pre-approved with two separate lenders. We have an inhouse lender, who will be happy to pre-qualify our buyers for backup purposes. They know that they'll be just in backup position.
1 vote Thank Flag Link Tue Aug 28, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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Yes, Yes, and Yes. The primary thing a seller wants to know is whether you can arrange the money.
0 votes Thank Flag Link Thu Aug 30, 2007
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