Mortgage Loan Offer/Pre Approval ??

[seemiyah]

Ok so I am going to buy a house, I have bought one before long time ago and I just went to the bank and got the pre approval. So this time I am shopping around for offers, so when I go to the banks I am asking them to provide me with an offer quote? I am not trying to get pre-approved from all of them right just a rate quote? A so it called?

[Yuriatin]

Re: Mortgage Loan Offer/Pre Approval ??

Seemiyah -

If you've gotten preapproved, then that means that you have gone to a bank and given them your ss#, all of your financials, they've run your credit report, sized you up and decided what $ amount they're going to loan you - decided what $ amount you can afford and a rate.

I've found that being pre qualified and preapproved are terms that people sometimes get mixed up. Not saying that YOU are mixing them up - just something I've come to find to be the case lately.

Ideally, you should first have a $ amount in your horizon that you can afford or want to borrow. You should've run your #'s yourself - which I'm assuming you've already done. You already know your credit score - or you should. I wouldn't set foot inside a bank, etc, without first knowing my credit score.

It's a good idea to get PREQUALIFIED first.

This is like a rough guesstimate.

Just get with your financial institution and say, Look, my credit score is so & so, etc etc. I make so & so and have $ in reserves. What's the best rate you can give me?

They should then, give you a rough estimate - usually just verbal or might sometimes just written.

If they tell you that you have to give them your ss# in order to prequal, I wouldn't. You don't need to give a ss# to prequal. Remember, you don't want every tom dick & harry running your credit right now. Tho they'll tell you it's no big deal, it is. You should also run like the dickens if they tell you they're going to charge you a fee or any kind of application fee just to get prequalified.

Preapproval is a different animal - but same species.

Preapproval is you actually supplying documentation to the financial instituion and they run the #'s and your credit report, and give you a rate and the amount they're willing to loan you.

At this point, they'll give you a pre approval letter and then you hit the ground searching and house hunting. That preapproval letter is good for 90 days, depending on the bank. It varies. This is because a lot can change in that time. ie, what happens if you lose your job in the midst of your search, etc, you know what I mean.

Just a rough outline answering your questions. This all depends on your personal situation and details tho - ie, I'm speaking specifically to US homebuying, not CA/UK.

And you're correct, you're not needing to get pre approved from 10 diffent places. However it IS good to get a quote from as many as you can. IMHO tho, you can pretty much figure out or ballpark what your rate MIGHT be by running your own info.

The going rates are easy as pie to find.

If you know your credit score, solid work / wk history, fat dwnpymt, etc, then you know right then and there you have a decent chance of getting the prime rate or close to it.

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: seemiyah</div><div class="ubbcode-body">Ok so I am going to buy a house, I have bought one before long time ago and I just went to the bank and got the pre approval. So this time I am shopping around for offers, so when I go to the banks I am asking them to provide me with an offer quote? I am not trying to get pre-approved from all of them right just a rate quote? A so it called? </div></div>

[seemiyah]

Re: Mortgage Loan Offer/Pre Approval ??

Thanks Yuri, yes I know my credit score and how much I want to borrow, and yes I run those calculators that when you put in your information it give you a ball park of what you can afford etc. The everybody running your credit is what I was wary of as you pointed out, so what I need from them is a quote and then when I decide who I am going with I get preapproved, cool thanks.

[Yuriatin]

Re: Mortgage Loan Offer/Pre Approval ??


Yes – generally, very generally, those would be the steps.

ie; let’s say you’re going with 6 banks and you have all 6 run your credit. <span style="font-style: italic">(btw, 6 is too many-this is just for example)
</span>
They’ll tell you it’s no biggie because the bank knows that you’re shopping for a mortgage and the shopping is taken into account.
<span style="font-style: italic">
“Don’t worry – these are all soft hits.”</span>

But in fact, they do hold all those inquiries against you – I don’t care what they claim.

It’s best to narrow down the 2 or 3 banks you want to roll with and then, have them run your CR.

Also - after they run your report - <span style="font-weight: bold">ask them for a copy of it</span>. Remember, the score THEY see and the score YOU see are often, 2 different things.

Also Seemiyah, as you may already know – watch out for all those fees!

Example - some will want to charge you a “commitment” fee.

Some want a commitment fee JUST for getting preapproved!

Tell them to go to hell.

They love to throw this around – commitment fee.

How the hell is someone going to pay a commitment fee when you haven’t committed to them yet?!!
<span style="font-size: 8pt">
<span style="font-style: italic">(bastards)</span></span>

On a side note, very personally, I hate those online calculators that tell you or suggest how much you can afford.

They’re a very, very poor guideline – IMHO.

They are woefully inaccurate and don’t take into account real life. I think people should use them with 1/2 a grain of salt.

Anyway, sounds like you’re on the right track with it all.



Best of luck with everything!


<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: seemiyah</div><div class="ubbcode-body">Thanks Yuri, yes I know my credit score and how much I want to borrow, and yes I run those calculators that when you put in your information it give you a ball park of what you can afford etc. The everybody running your credit is what I was wary of as you pointed out, so what I need from them is a quote and then when I decide who I am going with I get preapproved, cool thanks. </div></div>

[Yuriatin]

Seemiyah, excellent article for you

See here.

I've been dying for them to do this.

Finally!

---<span style="font-weight: bold">
<span style="font-size: 17pt">
Comparing Home Loans Now Easier</span></span>
Published: Friday, 15 Jan 2010 | 11:52 AM ET
Text Size
By: Tracey C. Velt, Bankrate.com


CNBC.com
Comparing home loans just got easier, thanks to the first industry-standardized good faith estimate, or GFE, that was rolled out by the U.S. Department of Housing and Urban Development in January. The new form more clearly details closing costs so homebuyers can shop mortgage loans with different lenders and compare the costs easily.

After all, finding the lowest-cost home loan can be confusing. What's the difference between a lender processing fee and a document fee? What's a yield spread premium and how does it affect how much my mortgage costs?

&quot;The problem in the past,&quot; says Brian Sullivan, a U.S. Department of Housing and Urban Development, or HUD, spokesman, &quot;was that there was no standard good faith estimate.&quot; From loan originator to loan originator, each GFE looked different. That's why, as of Jan. 1, 2010, HUD developed a new standard GFE. &quot;Now the consumer can match loan estimates, line-by-line to find similar fees and charges,&quot; says Dawn Davis, president of Rate One Inc., The Mortgage People in Memphis, Tenn.


<span style="color: #FF0000">For example, one loan originator may call a fee a processing fee; another may call that same fee an application fee. Same fee, different names. The new form standardizes that information. The new form also makes clear the terms of the loan.</span> Is it a fixed rate or adjustable? Is there a prepayment penalty? Can your loan balance rise?

The new GFE could save you some money as well. HUD is estimating it will save borrowers an average $700 per loan, according to the report &quot;Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis.&quot; However, higher appraisal costs may make that figure lower.

&quot;This new GFE will hold the loan originator's feet to the fire so consumers can be fully educated about which loan they're applying for,&quot; says Sullivan.


<span style="font-weight: bold"><span style="color: #FF0000">Here are some tips</span> </span>for using the new GFE to shop for a loan:

1. Compare apples to apples. First, understand rates change on a daily basis. &quot;Shop lenders on the same day and even the same time,&quot; says Benjamin Clark, a broker with Homebuyer Representation in Salt Lake City. &quot;Rates can change between Monday and Thursday. Tell them you need their best quote as of noon Eastern on a specific date.&quot;

The new GFE clearly specifies your interest rate, how many points you're paying for that rate and the terms of the loan. &quot;Are you comparing a 30-year fixed loan with a 15-year fixed loan? If so, you're not comparing apples to apples,&quot; says Davis.

[seemiyah]

Re: Seemiyah, excellent article for you

Thanks Yuri, I actually read about it on HUD website.