Mortgage Loans

[jjmtmj126]

Long story short....Was told to "go shopping" by first broker who just ran our credit.  Then found out she didn't participate in grant programs.  Went to Loan Officer from a major bank in my state because he did grants and FHA.  He put our loan through Automatic Underwriting program and it came back "refer"(denied).  He said he didn't know why, but gave us some suggestions.  (get rid of open dispute, pay off credit cards, wait for inquiries to fall off).  As I said on another post, it seemed he wasn't willing to work for us at all.....

SO...  Taking the advice of other people on this forum, we searched for another lender.  I applied on Lending Tree and found a mortgage broker.  Spent all day talking to him today, he ran my credit, put our app through the Underwriting, and said we were approved!  BUT... I've got red flags because of the LO from the major bank.  He said we were denied, he said we had to do this and this and this...  but this new guy said everything was fine.  I'm concerend though, because he said we were approved for $130,000 where the other guy said only around $110,000.  he also said he COULD send us a pre-approval letter but he'd rather wait until we found a house we like and write the letter for the amount we offer.  Is this common?  Is there a general undewriting program all lenders use, are the FHA rules standared?  How could one lender say "nope... you have to do this and this first" and another say we are fine?  I want to beleive it, but it seems too good to be true!!!  

[cassembler]

I would get the pre-approval letter and good faith estimates based on a couple of different price points (90k, 110k, 130k). Check out the APRs, etc. It does sound too good to be true, but once you figure in everything, it may just be a sub-par loan.

What's your profile?

[germaine47]

I was qualified for XXXXX  loan, but my Mortgage Broker asked what I was comfortable paying.  I calculated how much I was willing to pay each month and she wrote my preapproval letter based on that, she said, "I will write it for 95000 that way you wont be pressured into anything that you aren't comfortable with and if you need it for more I will send out a replacement to reflect that amount. I had to send all my financials in prior to them giving my preapproval letter, (W2s, tax returns, 401K statements, and pay stubs).  My realtor thought Sellers  wont take you seriously without your preapproval letter.

[Walt_K]

The two lenders may just have different DTI ratios they are comfortable with.  One is willing to stretch a little further than the other.

It's not odd to have them wait to give you a preapproval.  A lot of people want to have a preapproval that is the same as their offer so they are not showing the seller how much they can get financed for.

[jjmtmj126]

wow, thanks guys!  You are making me feel so much better about this!!!  And Walt_K, tha'ts exactly why he said he wanted to wait until we wanted to put in an offer.  So the seller won't know how much we are approved for.   I guess I can sleep a little better tonight knowing this guy probably is for real.  I don't know how trustworthy Lending Tree is, but I ASSUME that they wouldn't refer me to a place that lies and cheats and decieves.  The BBB also gave this place an A-, so if that says anything....  

[ripper998]

One thing my lender did was approve us for what I was comfortable with but send me a pre-approval letter in a word doc so I could reduce it based on the home we were purchasing. 

[iamwhoiam]

Yes, that pre-approval letter can be a bad thing. Typically though, it is for your realtor so they know they aren't wasting their time showing you houses.

My sellers wanted a copy of mine prior to signing the final purchase offer. I refused until they signed. We added a contingency that the offer was only valid for 24 hours unless I submitted to them my pre-approval. I had it to them 10 minutes later. I certainly didn't want them to try to negotiate for a higher price since I had a ton of wiggle room.