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Thanks to the many tips from my fico. I was able to raise my scores (need to update signature with current scores) to be pre-approved for an FHA loan. I now have a question how long is a pre-approval good for exactly? I am interested in purchasing a pre-construiction low income home that will not be delivered until late July/early August however they are taking contracts on the homes now. How will this process be different than if I was to purchase a home that is already constructed? Can I put my contract on the home now and then have to do the process all over again?
If it makes a difference I will be purchasing in DC.
The pre-approval is good for as long as your credit report is valid, which usually is 120 days if you are buying new construction. Late July would be over 120 days away, so there would be an additional credit check (there often is, even if you close within 120 days) before closing. They probably will also need to review paystubs & bank statements to make sure your financial situation hasn't changed for the worse. It's not a big process, the loan officer just asks if they can re-check your credit, you give them the thumbs up, send them your most recent paystub & bank statements, they review and that's it. You don't have to go through the entire loan application questions and what not again.
The builder may require you to get pre-approved now, or if they are building the homes anyway then you could have some time before you need to provide a pre-approval. Their sales office will let you know what they expect of you, and by what date, and it will all be spelled out in the contract too. Also, because I'm not sure how much you do or do not know, you actually get the mortgage after the home is complete, not while it's being built. The appraisal can be done prior to the home being completed, along with the title work review, so as soon as the certificate of occupancy from the county is issued, the appraiser would go back out there to confirm/snap some photos, and you would sign docs/close a few days later.
Thanks for the information Shane!