Shakti,

The 2008 GAR Contract for home purchase has changed. The wording regarding walking away from the agreement due to financing has changed. If you are using that Purchase contract, and have questions about it, you should consult with a real estate attorney if you have concerns about getting your E/M back if you have to walk away for that reason.

Thu May 8 2008, 14:31

Is this true "In Georgia, you could hurt yourself financially by not being approved before you look at homes. The earnest money is no longer contingent on your financing. "

So even if i put a contingency in the offer on satisfactoty (rate specified) loan financing, I will not get my earnest money if I am not approved for a loan?

please help.. thanks

Fri Apr 18 2008, 13:46

These are all great answers - I will clarify a few things:
You should get pre-approved by a lender prior to making an offer.
Pre-qualified is not the same, it's based on information that you provide rather factual data.

Having more than one lender pull your credit will not adversely affect your credit as long as it is done within a certain time frame - confirm with the lenders what this is - I believe it is 30 days. Multiple credit "inquiries" for the same purpose will only count as one "inquiry" or "pull" if done within this time frame. Also ask the lender if they will pull your credit again prior to closing.

I agree with Joshua, sometimes a lender you feel comfortable with and gives you accurate answers (rather than yes to everything) may be the way to go - their higher estimate may just be more realistic and honest.

To clarify the semantics of it, you cannot actually APPLY for a loan until you have a property address or more likely a binding (signed by buyer and seller) contract.

As several mentioned, sending a pre-approval letter with your offer is always a good idea.

IF you are looking at buying new contruction - I have seen your other posts - a lot of the incentives that builders offer will be for using their lenders, so be mindful of that as well.

You should ask 3 questions of your Realtors when interviewing them in this case ...
1) Are they full time?
2) Do they have experience with new construction?
3) Are they comfortable/experienced making low offers and will they develop a rapport with the listing agent (or builder's agent) or just fax offers and hope for the best?

It sounds like you have identified an area (or subdivision) of interest, have good credit and are gathering the knowledge you need to make informed decisions.

Best of luck to you!

Fri Apr 11 2008, 19:51

It's always best to get loan approval before you even start to look at homes. Especially in todays turbulent lending environment. Get a commitment letter from at least 1 or 2 companies and don't be afraid to shop and compare rates and fees. You'll be shocked at how much fees can vary from one company to another. Ask your friends and co-workers about their experiences with banks and individual lenders. good luck and have fun with your purchase.

Fri Apr 11 2008, 17:35

Shakti,

I always say pick three as well. But don't do a lending tree thing, use referrals.

In Georgia, you could hurt yourself financially by not being approved before you look at homes. The earnest money is no longer contingent on your financing.

If you have great credit, you shouldn't have any problems.

Another note: Sometimes the best deal isn't the best deal. If you feel more comfortable with one loan person over another, you might be able to get the same deal.

Be sure to shop at least ONE mortgage broker.

Fri Apr 11 2008, 17:23

Shakti -

If you’re making an offer on a house if the agent representing the seller is good he/she will ask you for a pre-approval letter from your lender as part of the offer to show you can afford the house.

When your offer is accepted by the seller than according to how your contract was written & agreed upon you have so many days to apply for your actual loan. So to answer your question is your not applying for the loan until you have an accepted offer & there for a contract on the house.

John J. Reinhardt
RE/MAX Greater Atlanta
678.784.4440

Fri Apr 11 2008, 17:06

When getting three lender good faith estimate for costs, do not allow all the lenders to pull your credit. Yes, it can effect your credit score. Best to allow only one to pull credit.

Fri Apr 11 2008, 13:56

Always contact a mtg co. 1st to be pre-approved and assure the seller and yourself that you have the purchasing power to continue. However, I would wait until after the contract has been agreed to and after atty review has subsided to apply.

Fri Apr 11 2008, 13:26

I always suggest that my buyers apply previous to going home shopping. It makes things so much easier and better for the buyer when they find a home that they would like to buy.

Fri Apr 11 2008, 09:30

Thanks sandy shores, if I get pre-approved ann my search goes beyond 30 days then I will have to reapply for a loan and by then my credit history will be hurt , right ?
bacause of all the credit report pulls by these 3 lenders ?

Thanks again...

Fri Apr 11 2008, 09:19

Always get pre approved BEFORE you even look at your first property. Contact 3 local lenders to the area you are interested in buying in. Get 3 written estimates for closing costs from them, and determine which one is best for you.

Your preapproval in hand will allow you to know the price range you are looking for and the criteria of the home you may need to purchase based on the type of the loan you are getting. Your preapproval will also assist you when you place an offer on a home, as it shows a seller you are a serious buyer.

Your excellent credit history will be an asset.

Happy Hunting!

Fri Apr 11 2008, 09:08