When should one get pre-approved for a mortgage? And typically how long does the pre-approval last?

Asked by jme1282, Boynton Beach, FL Tue Oct 18, 2011

I understand that all lenders are different. I am looking to qualify for a FHA loan in Florida and I understand that certain lenders process these types of loans. I've looked at homes here on Trulia and other sites, worked out the "how much can I afford" calculators, and have a pretty decent idea of what price range I will fall into and what I can afford. My credit is fair, I have debt I'm paying back, and I'm on time with payments. My current lease is up in March. I was just wondering if now is too soon to start the home search process (not just online, but actually looking at homes) and when I should contact a lender to get approved?
Thanks!

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20
Antonio Vega…, Agent, Saint Cloud, FL
Tue Oct 18, 2011
Jme:
The pre-approval will be good for 90 days from issued. However if your credit is not that great, start right now by talking to a mortgage broker who can give you pointers on how to increase your scores within the next 3 months. That way your pre-app obtained in January will be much better and also at a better rate. Don't start seeing homes till february. Homes you see now will have sold way before March. But do start driving into the neighborhoods and familiarizing yourself, so whe it comes time to buy you will know exactly where to look.

Tony Vega
3 votes
, ,
Tue Oct 18, 2011
Hello jme,

Its never too soon to get pre-approved. That way if there are any issues that you need to be aware of, you will have more time to take care of them. For example, there may be items needed to be removed, from your credit report; or a few more dollars down-payment might save you $$$ by removing monthly PMI. Therefore starting the process earlier may take your plannikng into a more positive and productive direction.

A credit report is good for 60 days but once pre-approved, you go looking until someone asks for a more updated approval. Once you are ready to put an offer in,m the lender should update the credit at that time.

Best Regards,
Alan Openshaw
Cornerstone Lending
Southampton Pa
267 992 7276
VOTED BEST OF BUCKS 2010
2 votes
Alma Kee, Agent, Tampa, FL
Tue Oct 18, 2011
Also if you're a first time homebuyer or VA Buyer (veterans aren't required to be a first time homebuyer) and your income doesn't exceed about $70k with a 1 person household, you may be able to get downpayment assistance via the Bond program in Florida for $5k or up to $7,500. You can search by your county and the number in your household to determine your eligibility here:

http://apps.floridahousing.org/StandAlone/FTHBWizard/FTHBWiz…

If you are eligible, you MUST work with an APPROVED lender so select one of the lenders on the list.

All the best,
Alma
http://www.SoldOnTampa.com
1 vote
Hi Alma, thanks for your reply and information you've given here. I know it was back in 2011, so hopefully this finds you. I'm getting ready to relocate to Florida (end of May, 2017) and will be looking to buy a home after I arrive. I'll be a first-time buyer and I'm also a veteran that's never used my VA benefits. What would you recommend me doing regarding getting pre-approved and any other first-time buyer programs. Thanks, Peter
Flag Tue Feb 28, 2017
jme1282, Home Buyer, Boynton Beach, FL
Tue Oct 18, 2011
Thank you for all the responses!! I have a lot to consider and a a lot of work ahead of me. Thanks to all of you who responded.

-Jamie
0 votes
marc jablon,…, Agent, Boca Raton, FL
Tue Oct 18, 2011
Hi, jme 1282-

If you're looking for a home in Boynton Beach and you'd like to be in by March, then you may want to start your prequalification process with a mortgage broker now.

You mention that your credit is fair and that you have debt you're repaying. Your mortgage broker will be able to give you a realistic idea of what you can comfortably afford based on how much you owe, your current credit score, and your current earnings.

If your credit score is below 620, your mortgage broker may have suggestions as to how you can remedy this. If you're above that score, your mortgage broker will give you suggestions on how to remain at or above that level in order to qualify for the best mortgage rate possible for you.

Once you have gotten a pre-approval letter, it is good for 60 days. When you have that letter in your hand, call a realtor and begin your search for Boynton Beach homes.

However, once you locate a home in Boynton Beach that you like, and you and the sellers agree on a price, you are still looking at 45-60 days until closing, assuming that title is clear and there are no snags in the mortgage process.

During that process, your lender will be reviewing your finances very carefully, and your mortgage broker will advise you as to what information you will need to supply and what kind of expenditures to avoid.

Because you are applying for an FHA loan, you will find that Boynton Beach homes that are listed as short sales or REOs may be difficult for you to purchase, despite the allure of their lower prices. That is because these homes are usually subject to multiple bids and banks typically opt to accept cash offers for these properties.

If you make offers on Boynton Beach homes that are still controlled by the owners, you will receive a response to your offer within 48 hours. If the homes in Boynton Beach that you bid on are short sales or REOs, you may be waiting several weeks to several months for a response to your offer. By that time, your pre-approval will have expired, so you will have to apply all over again.

Right now, until you have a pre-approval, you should search for houses in Boynton Beach on the Internet.

If you are comfortable breaking your lease and paying your landlord a previously agreed-on amount, then you can start searching for Boynton Beach houses with a realtor as soon as you have your pre-approval letter in hand. If, however, you plan to wait until the end of your lease to move, then you should start looking some time around December 15.

It will probably take you 2 weeks or more to search for and decide upon the Boynton Beach home you prefer. So you're already into January. Then, assuming you and the sellers agree, you're into the 45-60 days mortgage approval and processing time, and sometime around the middle of March, if everything goes well,
you will move into your new home in Boynton Beach.

If you do not have a mortgage broker at this time, I will be pleased to give you the names of a couple of brokers who are very helpful and easy to work with.

Marc Jablon, The Jablon Team
Realty Associates
JablonTeam@gmail.com
561-213-6139
http://www.JablonTeam.com
Web Reference:  http://www.JablonTeam.com
0 votes
Alma Kee, Agent, Tampa, FL
Tue Oct 18, 2011
Realtor Nicole is right in that the very best deals (bank owned) will require you to close no later than 45 days.

Some Short Sales (although most are not) may be worth the wait and you will need to extend your lease and go on a month-to-month expensive rental basis if you want to attempt to go through the lengthy and risky process on a short sale. The asking price on a Short Sale, if not previously "approved" is purely fictitious and the lender will do their own independent valuation so you will not likely get a "steal" and will also have a lot of headaches. Short Sellers often abandon the property without air conditioning and remove all appliances (even if the contract says they're included--good luck with getting compensated after they're removed) and light fixtures and even window treatments and garage door openers. So until your final walkthrough the day on or before closing, you may not know the current condition of the property.

Save yourself a lot of headaches and start looking now for a true bargain and it should also justify paying a lease cancellation fee if needed. Also make sure to look past the "ugly" and get your loan approval for an FHA 203K fixer upper mortgage so asset managers for the bank owned listings will value your offer nearly as high as an ALL CASH offer. An FHA 203K S will allow you to hire an approved contractor (Home Depot, Lowes) to paint, new flooring, granite counters, new roof, new a/c and you will end up with a model condition home without lifting a finger. You hopefully should end up with "instant" equity as well.

Hope this helps.
All the best,
Alma
http://www.SoldOnTampa.com
0 votes
Nicole Marks…, Agent, Boca Raton, FL
Tue Oct 18, 2011
Hello. If you want to start looking at homes now you should get pre-approved now. However, unless you are comfortable ending your lease early it may make more sense to wait a couple of months before you begin looking at property. If you find a home that you want to make an offer on now very few sellers would be willing to wait 6 months to close. In the meantime, I can put you on a "drip" campaign so that you can see what is available now and fits your search criteria. If you are intererested in this please call me at 561-445-8743 or email me at Nicole@BuySellBoca.com.

Sincerely,
Nicole Marks Mason, Realtor
http://www.BuySellBoca.com
Web Reference:  http://www.BuySellBoca.com
0 votes
Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Tue Oct 18, 2011
jme1282,

There are some great replies below and because this is such a common question, I actually created a short video that talks more about the pre-approval process. The link is below. Typically, a pre-approval is good for about 3 months, at which point the lender will want to update the credit report. You can help your lender by providing your current paystubs and bank statements, once pre-approved, and this way your file stays up to date.

Best of luck,

Rob Spinosa
rspinosa@rpm-mtg.com
0 votes
Bob Brubaker, Agent, Lake Worth, FL
Tue Oct 18, 2011
The pre-approval process is going to give you some valuable "feed back" not only
where you stand but advice on the actions you could take to improve your credentials. So
better sooner than later.
FHA Lending is specilized! While many firms offer FHA loan products - you want to look
for a Mortgage Banker that has been approved as " Direct Endorsement Lender" by the FHA.
There are frequent changes and updates made to the FHA lending program. Mortgage
Bankers closing with their own money have to keep a sharp eye on the latest.
I would strongly suggest some review of a lender's FHA credentials and experiece in your
selection of a pre-approval source! More info at http://www.hud,gov links to FHA and as
stated elswhere I too -strongly recomend a visit to the mtgprofessor.com web-site! Best
of Luck!
BOB BRUBAKER HIGHLIGHT REALTY PALM BEACH COUNTY FL. 561-876-6649
0 votes
Anna M Brocco, Agent, Williston Park, NY
Tue Oct 18, 2011
Be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously; therefore do visit with any loan officer(s) before fully beginning your search...
0 votes
Diane Balsara, Agent, Boynton Beach, FL
Tue Oct 18, 2011
I would start now. There is nothing like knowing exactly where you are in order to get to where you are going. Find a mortgage broker that is willing to work with you and give you a game plan to improve your credit score. Some FHA's are requiring as high as 640 now and the higher you have the better. There are what is called 'compensating factors' on an FHA approval. If your ratios are high but your cash reserves are strong and your credit score is over the limit you may get approved on a loan that you would be turned down for if the other two compensating factors were low. You will need a good week- two to get all the info in to the loan officers, they will need a week to truly process you and get your file together, your approval is good for 60 days from a Realtor's standpoint. We do a lot of foreclosures and I won't take a pre-qual any older than 60 days and prefer 30. If you factor a month to get your approval and it is taking 90-120 days to find properties, then you need to close and if it's a normal sale you can close within 30, otherwise our REO's are sometimes taking 45-90 days due to simple title issues and a short sale could be much longer. I think now is a very good time to just getting things going so you know where you are at. I would interview three loan officers and decide one you want to work with. Start your search at the end of November. Be prepared that if you are looking at an REO (foreclosure) you may need to qualify with their lender, usually, one of the big box banks, so choose a mortgage broker and you will most likely be asked to also go to one of the banks as well. Do not give ANYONE your original copies- you may need them again, make copies of anything you are asked for. Even if you close in February you would want the month to go in and clean and spruce up your new property! Good luck.
0 votes
J, Agent, Greensboro, NC
Tue Oct 18, 2011
The first step, I would highly advise not looking at properties until you have inquired with a lender about financing based on your individual situation. If you can't qualify at this time then you've saved yourself and an agent time, gas, and efforts. The second step, if you may "pre" qualify/approval the lender letters range from 30-60 days. Getting actual "approval" for financing will require a purchase contract on a property, plus you submitting your documents supporting income/debt and tax returns among the documents. Until the paper documents are submitted regardless if a letter states "pre-approval" you are indeed "pre-qualifed" only. The lender can't approve or deny financing for a mortgage loan without the documents.

A new trend with sellers is beginning. Because majority of letters say "pre-approval," sellers are requesting an email from the buyer's lender as too where the buyer is in the process and has the request gone in to underwriting yet; partially or fully. This will provide important information whether a seller accepts an offer or not. In today's market, sellers are not willing to take their homes off the market without additional information. I hope this has been helpful as you decide going forward. Good luck!
0 votes
Susanna Malm…, Agent, Jupiter, FL
Tue Oct 18, 2011
Dear Buyer,
I agree with the first answer by Rachel Dammann, Agent, Westminister, Colorado.
"You should contact a lender now to make sure your credit, debt to income ratio, and income meet the underwriter's requirements. The lender will also take into account the property taxes, insurance, and hoa into your monthly payment to make sure the underwriter is happy with your monthly debt.

If you are considering moving in March, you might want to look now. If you find a property that you like that happens to be a short sale, it could take months to get it processed and approved."
0 votes
Tom Priester, Agent, Tequesta, FL
Tue Oct 18, 2011
Vervy,

If you are looking for a purchase in March you are probably a bit pre-mature unless you want to start looking at short sales. While many banks are getting better about moving these files some still drag but if you are capable of closing earlier than the end of March you might want to start treading these waters now. Otherwise for traditional and bank owned deals I would sit tight for another couple months.

Buyers can get some amazing deals on short sales with the key being to lock it up at below market value and hope for a low valuation from the bank. So much has to do with what type of property you are looking for. The pre-approval process is painless and you should really select a Realtor® first as they should have great relationships with lenders who can provide updates expeditiously. You will need a pre-approval to have any short sale offer submitted so you do want to do that up front. Keep in mind that a short sale contract if properly written is really nothing more than a free option on a property but do not waste your time unless it is a property that you really want.

I work almost entirely as a buyers agent in Palm Beach and Martin Counties and certainly would be honored to be on the list of Realtors® you interview and happy to be of assistance in any way that I can.

I hope this information is helpful but if you need anything additional please do not hesitate to give me a call.



Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com -
Web Reference:  http://www.tompriester.com
0 votes
Carol Perdew, Agent, Manteca, CA
Tue Oct 18, 2011
Hello,

Though you may be willing to spend a certain amount, the real determination of how much house you can afford is driven by how much a lender calculates you can afford. So before you begin to search for the perfect house, it is very important to begin the home buying process by getting preapproved. Getting preapproved for a home mortgage loan in the beginning of your home search will provide you with a preliminary statement on the size of loan for which you can qualify. Knowing this, you can then focus your home search.

Preapproval gives you a very good indication of:

• How much down payment you’ll need
• Your closing costs
• Your monthly payment (including PITI: principal, interest, taxes and insurance)
• The type of loan for which you qualify and which best suits your needs; and,
• Special programs for which you may be qualified, including those for veterans, first-time buyers, teachers.

Thanks,
Carol Perdew
Prudential California Realty
(209) 239-7979
Carol@PerdewHomes.com
DRE 985176
0 votes
Alma Kee, Agent, Tampa, FL
Tue Oct 18, 2011
If your credit score is close to 620 you have to be VERY careful about allowing lenders to pull your credit. Also credit unions pulling your credit may count as a 2nd pull even if it is within your 2 week allowable "mortgage shopping" range.

Here's a very helpful website about Mortgages created by an Ivy League Professor:

http://www.MtgProfessor.com

One of the recommended "UPfront" lenders is:

http://www.Amerisave.com/myrea/Alma

Hope this helps.

Alma
http://www.SoldOnTampa.com
0 votes
Paul Saperst…, Agent, Boca Raton, FL
Tue Oct 18, 2011
The preapproval should last several months. Worse case scenario the mortgage broker will reissue you one if it expires. We should start looking now. Please send me your email address, contact information, and search criteria and I will email you properties that match your criteria.

Thanks,
Paul Saperstein
Re/Max
5612515296
0 votes
Lisa Birdsong, Agent, Frisco, TX
Tue Oct 18, 2011
Once you've decided to search for a home, you should get pre-qualified. Although many sites provide mortgage calculators, etc., a lender will give you a near-exact quote of all closing costs which are not reflected on most online tools.

Ask your friends and family for lender recommendations, or if you already have a Realtor, see if they recommend one. A good lender is great to have.

Best of luck to you!!
Web Reference:  http://www.lisabirdsong.com
0 votes
Gary Goldberg, Agent, Boca Raton, FL
Tue Oct 18, 2011
Hello:

Sure, the first step is to contact a mortgage banker/broker to see if and how much you qualify for. If you'd like, I would be happy to recommend someone for you to speak with. He is a Wells Fargo mortgage banker.

Secondly, looking for a property that fits your needs is critical. If you would like, I can show you property when you are ready.

Thank you

Gary Goldberg, P.A.
0 votes
Rachel Damma…, , Westminster, CO
Tue Oct 18, 2011
You should contact a lender now to make sure your credit, debt to income ratio, and income meet the underwriter's requirements. The lender will also take into account the property taxes, insurance, and hoa into your monthly payment to make sure the underwriter is happy with your monthly debt.

If you are considering moving in March, you might want to look now. If you find a property that you like that happens to be a short sale, it could take months to get it processed and approved.

Good Luck!
Web Reference:  http://www.racheldammann.com
0 votes
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