Pre-approval

[ajzjmsmom]

It has been 14 year since we bought a house and 10 years since we sold that house, hoping to jump back into home ownership now that we are finally going to settle down.  When we bought our other two houses, we didn't seek pre approval until after we put in an offer.  I know things have changed since the last house we bought, what is the normal process now?  Our lender has looked at our income, looked at our self pulled credit reports and since we had already paid off the CC debt we owed, advised that we just need the CR's to reflect those payoffs, then we are good to go.  Right now wth the montly payments still not updated and with the mortgage amount we are seeking the DTI is 40%, knowing that by the end of the month, those CC's that have yet to update a 0 balance, will do so, we are waiting until the first week of Feb to even consider allwoing a hard pull on our CR.   Should we go ahead and put in an application prior to starting our house hunting or wait until we find a house?  We are flying to TN on Feb 8th and already have a realtor lined up to show us houses.

[ShanetheMortgageMan]

I'd definitely wait until the loan officer checks your credit rather than just reviewing the reports you've provided yourself.  You want to be pre-approved (loan officer reviews all of your documentation, and perhaps even an underwriter too), and right now it sounds like at best is the loan officer has pre-qualified you (giving their opinion on your chances of getting approved).  I admit that sometimes your timeline requires you to look at homes prior to becoming pre-approved, and that is fine, however sellers almost always want a pre-approval letter to accompany your offer so you may be at a disadvantage vs. other buyers by making offers without one.  A DTI of 40% should be fine for pre-approval, but you may get some extra points if those accounts are reflected as a $0 balance.

[ajzjmsmom]

You are correct that our loan officer has only pre-qualfied us.  He said he was pretty sure that even though  not all the CC's were showing 0 balance we would still be approved  if he ran the application through Fannie Mae right now but we would look even better with our DTI a little lower and we agree with him.  We are also hoping to see some movement on the credit scores, although they are not bad, the things keeping them low as of the end of the month will no longer be an issue.  We feel like we are somewhat under the gun and would really like to get into a mortgage before interest rates and house prices start climbing, I know the best anyone can do is a guess as to what is going to happen to interest rates and house prices over the next year.  We went from being prepared to move at the end of Feb to a rental to give our scores 6 months to go up, to realizing that we could actually qualify for a mortgage now and get in on the rates before they go up any higher.

[DallasLoanGuy]

if you trust the loan officer..... go ahead and look if you can.

most realtors wont drive without a preapproval letter.