Advice: where to get 'pre-approval' for a loan that won't close until 31 May 2009

[Anonymous]

W e live in PA and are purchasing a 'Green Home' near Austin, Texas and the lender will offer a 'sign now, build slow and close by 31 May 2009. They want a 'pre approval' for the loan of $243,000 with a 10% down. I don't want to jeopordize our FICO (around 700 since bankruptcy and foreclosure 6 years ago) by looking in the wrong places for this 'non-binding' (since the close is so far away) loanl.  We have more than enough income to qualify for even a larger loan but want a reasonable mortgage with diminished retirement income when Hubby retires.  Any suggestions? Do I use the 'online' Lending Tree? a bank in distant Texas? A local PA lender especially since we will live, close etc. in Texas? Thanks

[ShanetheMortgageMan]

Well first you want to make sure that where you are looking is able to do business in TX.  TX does have individual state loan officer licensing requirements, so odds are that you will be able to go to your local lender in PA to ask for a loan to buy a home in TX won't work out.  Punching your social security number in an online form without knowing who it is being sent to isn't advisable either, as I said, you never know who is going to get your personal info, it could be a legit company or it could be a lead miner who is gathering data to sell to another 30-50 lenders so you get phone calls until you change your phone number.  Unless you have personally spoken to the person who will receive your personal information from you, don't do it.  Since you are in PA it's probably going to be hard to find family, relatives, co-workers, etc. that have purchased a home who could also refer you their loan officer to help you in TX.  But their loan officer might be able to refer you to someone who they know who can do loans in TX, so it'd still be worth it to start talking to people you know about referrals.  Also, you might want to talk to the builder's preferred lender since they will be familiar with each other.

Anyplace you go to will need to do a credit check in order to give you an official pre-approval letter that the builder would accept.  Keep in mind that on new construction the credit report is good for 180 days, or 6 months, so if you are going to close on 5/31/09 and want to keep inquiries to a minimum, you can have your credit checked on 1/2/09 (since 1/1/09 is a Federal Holiday) and only need to have your credit checked once. 

However, once you've developed a relationship with a mortgage broker or lender, and he or she seems on the up and up, then it may not be worth it to look at other places.  Ask WHY on everything, that's what they are there for.  If your loan officer explains it to you in a way you understand, and takes the time to do it, then you have someone you want to keep.