How soon to get pre-approved to buy a new home after our old home closes?

Asked by C & A, 88011 Sun Apr 25, 2010

Thanks for your advice during the selling process! Now comes the buying process!
We have our documents in order and ready to go but how long should we wait so we get the best rate?
We were wondering, on average, how long we should wait until after our house closes before we get pre-approved for a new mortgage loan. We want the best rate and, while our current credit scores are in the 700's, we know that having a lot of activity (closing on one house, credit checks, receiving funds, etc.) at the same time could hurt our score. Is that correct?

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Matt Taylor, , North Carolina
Sun Apr 25, 2010
BEST ANSWER
You can get pre-approved right now based on the sale of your current home. You do not have to lock in a rate now fi you do not want to and can float until you find a property and in most cases during the process as long as your are locked before closing.

The rate can float or some companies like mine offer a PrePurchase Rate protection. That allows us to pre-approve your loan and lock in your interest rate on todays rates. If rates go down between now and the time that you find a house you can "float down" 1 time to the lower interest rate on a date that you select. Its really a great way to protect your interest rate while searching for a home.

Closing on the house and receiving funds will not have any impact whatsoever on your fico. The credit checks "could" depending on how many are done and over what time period.
0 votes
C & A, Home Owner, 88011
Sun Apr 25, 2010
Thanks! I guess I should have added we're buying in another city - otherwise, we'd be working with our current realtor; she's awesome!
0 votes
Dallas Texas, Agent, Dallas, TN
Sun Apr 25, 2010
Why wait interest rates are low during peek moving season from May - August interest rates increase.

Are you going to keep renting, living out of storage units, and boxes,

Closing on a home would not warrant any credit checks.

Credit scores would increase for fact you just lowered your debt ratio of not having a mortgage.

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0 votes
Billingham T…, Agent, Albuquerque, NM
Sun Apr 25, 2010
Your agent, Holly, is awesome. Ask her
:-)
0 votes
David Staffo…, Agent, Albuquerque, NM
Sun Apr 25, 2010
It will not change your credit score by much if any, so you should already be prequalified. Rates only change at certain intervals, so unless you change a lot or are near that line, your home sale will not affect the rate you get on your new loan. I can recommend some excellent local lenders, just let me know. You might also check my site for some exciting buyer incentives that can save you thousands! Congrats and best of luck!
0 votes
Marge Bennett, Agent, Fort Myers, FL
Sun Apr 25, 2010
Get approved now based on your contract and start shopping. that way you may be able to do a simultaneous closing and only have to move one time. Your Realtor will be hapoy to help you.
0 votes
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