topic Re: Pre Qual Completed in Mortgage Loans

Pre Qual Completed

Anonymous — Sat, 21 May 2016 14:03:35 GMT

Went through Pre Qualification Process Thursday, took one day to get pre qualfied. Have 710, 733, and 678 scores...they used 710. I am looking in Fargo ND and Moorhead MN area for FHA home. I had 2 charge offs that need to be paid before I can close (700 dollars total), recieved $6500 first time start up payment asssitance (as downpayment), make about $53k a year but had difficult time saving for down payment, and recieved $170k for home. My loan officer stated that I would basically have to have the seller pay for half closing costs and I would have to pay 1k down payment (earnest). Suprisingly, homes go quick around this area, go on the market and within hours they have 3 to 4 offers and sometimes cash offers. You really cannot touch a decent house around this area for under 150k. The pre qual is good for 4 months. I am meeting with a realtor today to go over everything and see how I can attack this market. Anybody else have similar experiences or has anybody bought around this area? Tips? Thanks!

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 14:24:59 GMT

That seems low for your income. Do you have a lot of monthly debt payments?

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 17:03:03 GMT

Yeah, my DTI is around 43% and I am just by myself.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 17:05:05 GMT

You might want to shop around. I've seen where lenders go up to around 50% back end DTI.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 18:13:19 GMT

Also be very, very careful paying those collections. Unless you pay to delete, the CA can update your account when you pay and it can cause your score to drop.

Are you going FHA or conventional. The collection payments could be an overlay. I would talk to another mortgage broker and see what they say about them.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 19:10:17 GMT

I am going FHA, the only thing that scares me is that I have a Lending club loan and recent credit card that will affect DTI when closing time comes that is not figured in yet. Some say Lending club does not report (have had the loan for a month and it has yet to report). The realtor that I met with today asked if I wanted to use her lender, she stated she may be able to do "more things" than my current lender. I just don't want a lot of hard inquiries.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 19:41:30 GMT

If you have your mortgage scores and your current minimum monthly payments that should be all you need to provide other lenders just to see what you would qualify for. If they give you the # you are looking for then you could proceed with having them pull your credit.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 21:28:58 GMT

Can I ask who your lender is? For FHA, there is no requirement to pay collections, so that is an overlay - if they have one, they are likely to have more you don't know about.

The goal of a realtor and lender is to get you to close the loan so they get paid. I'd at least talk to her lender and see what they can offer. I wouldn't recommend big box banks or online places like quicken. If your realtor has been in the business for a while, they most likely have lenders that can get the deal closed, I'd at least talk to them.

Your pre-approval happened really quickly - what did you have to provide. Just wanting to make sure it's solid.......

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 21:37:10 GMT

It is a small bank in Fargo, ND. I did not have to provide any documentation, basically filled out a application and that is it. They stated they will need me to give them three years taxes and pay stubs, but other than that nothing else. The offer is based on contgency of me paying off the charge off and a couple small balance credit cards.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 21:46:51 GMT

I hate to be the bearer of bad news. That pre-approval is not solid, not one bit. A true pre-approval will collect just about everything they need up front - pay stubs, tax returns (only two years is needed) bank statements, you name it.

I'd talk to the lender your realtor is recommending before doing anything else with this bank.

Re: Pre Qual Completed

Anonymous — Sat, 21 May 2016 22:03:43 GMT

I thought the same, but the letter she sent through email {pre qual letter} will suffice to put an offer on a house per my realtor. I think I may stop the process right now and pay down my car and installment loans to lower DTI and re apply in a year. Not sure yet if I want to continue on, the housing market is insane up here and it makes me nervous.

Re: Pre Qual Completed

flan — Sun, 22 May 2016 03:56:46 GMT

@Anonymous wrote:
I hate to be the bearer of bad news. That pre-approval is not solid, not one bit. A true pre-approval will collect just about everything they need up front - pay stubs, tax returns (only two years is needed) bank statements, you name it.

I'd talk to the lender your realtor is recommending before doing anything else with this bank.

That depends a whole lot on the bank, the region, the loan officer, what he put on the application, whether that's accurate information, whether that's complete information, and what's in his credit file (not his scores, the actual contents.). If he's provided accurate and complete information, and the loan officer is competent, there shouldn't be a problem when applies for the actual loan. If he's not provided accurate and complete information, then he'll have problems. If the loan officer doesn't understand the program the loan is in or doesn't bother to check things, there may be problems. If it's a big box bank, there may be problems.

My pre-approval was based on verbally providing the loan officer income and asset numbers, and a credit pull. And because we've taken our time at the process, that was information that was a year out of date (both income and assets went up in the meantime) by the time we made an actual offer. The conditions that came out of underwriting were trivial things, becuase underwriters have to have some condtions. (We'd transfered money into the kid's 529, and they wanted to see statments for that. and they wanted to be sure we had home owner's insurance on the place we're selling.) We took 23 days from offer to clear to cose; much of that was a backlog at the appraisers and title company.

Re: Pre Qual Completed

Anonymous — Sun, 22 May 2016 04:46:34 GMT

I'm also in a competitive market place for homes. Houses are sold within 1-2 days after hitting the market.

I was told to better my chances of beating out my competition on a home, I would be better served with a pre-approval letter rather than just a pre-qualification letter. Having this letter will speed up the time it would take to close the deal and that could mean a lot to the seller. It may be the difference in buying a great home that you love.

Re: Pre Qual Completed

Anonymous — Sun, 22 May 2016 13:28:21 GMT

What types of documents are needed at closing or for underwriting? Do they require bank statements? If so, how far back? My credit was already pulled, I am sure they will do so again at the time fo closing. Tax returns for the last 3 years? Rent verification for the last 3 years?

Re: Pre Qual Completed

Anonymous — Sun, 22 May 2016 13:31:10 GMT

2 years of tax returns and 2 months of bank statements. I don't believe they always verify rent payments but if they do it's 12 months worth.

Re: Pre Qual Completed

Anonymous — Mon, 23 May 2016 01:32:03 GMT

Thanks for responding. I think I am going to wait one year and reapply. I may try and refi my car and lending club loan to help out my DTI and pay down said lending club loan, or should I do that since that would bring down average age of accounts? Both lending club adn car loan are new so I suppose it would not affect it to much. I also want to have all my credit cards near 0 so they cannot use that against my DTI (have about 2k out of 20k available to pay down). My mid mortgage score was 710, maybe I can improve that as well but would that really matter? I am glad I went through the process but I want to get more than 170k (does not get you much where I live) and now I know what I need to do that. Thanks for ALL of the replies!

Re: Pre Qual Completed

Indycoltsfan — Mon, 23 May 2016 14:01:33 GMT

Lending Club does report to all CBs.... It may be delayed for some reason, but it will hit your reports at some point.

Re: Pre Qual Completed

Anonymous — Sat, 04 Jun 2016 18:58:53 GMT

Hi. Whom did you recieve your down payment assistance grant from?

Re: Pre Qual Completed

Anonymous — Fri, 26 May 2017 03:44:05 GMT

Re: Pre Qual Completed

iced — Fri, 26 May 2017 21:32:02 GMT

@Anonymous wrote:
That seems low for your income. Do you have a lot of monthly debt payments?

That doesn't seem unreasonably low - 170k on 53k income is more than 3x. I was pre-qualified for 300k with over 200k income and a much lower DTI (multiple of less than 1.5x). The lender may be doing a more conservative pre-qual.