Single Female - looking to buy a home as a first time buyer and looking for advice...

[laella]

Thank you all again for your encouraging words.

More questions

1. Is it true that I should not be inquiring into any homes without being approved for a mortgage? I was told that this has to be done first before any realtor will talk to you about a home.

2.  When looking into getting approved for a mortgage do you go to one bank or multiple?

3.  How long does it take to get approved?

I will have more questions.

I hope you all do not mind.

[StartingOver10]

It is true that when you start shopping for homes you will need a pre-approval from a lender.

However, you can shop on line for months, naturally, before you begin to shop in person with a Realtor.  Shopping online doesn't require a pre-approval. When you are ready to actually see homes in person, then you will want a Realtor to work with you. At that point, you will need a pre-approval. The pre-approval shows you are ready and able to purchase. If you find during your pre-approval process you need addtional documentation to supply to the lender then you have the time to do it prior to actually looking for your new home. It is simply the best way to prepare to purchase your home and to show you have the ability to close on any offer you choose to make.

The reason the Realtor wants you to have a pre-approval is two fold: 1) so you are shopping at the right price point for your budget and 2) you can then show the ability to purchase. When you make an offer, the pre-approval is provided to the seller's agent to show your ability/capacity to purchase. If you make an offer without a pre-approval, the listing agent either won't accept the offer or will counsel their seller to require a pre-approval before considering the offer. Just so you know, if you are a cash buyer, you also have to show ability to purchase - you show ability by providing a bank statement to the Realtor with the funds to purchase. The difference between the two is that in the case of cash the funds are immediately available and in the case of a loan, you are showing that the lender will provide the funds up to $X.

[laella]

For  pre-approval in going to the lender do you have to choose one or can you go to a few?

[StartingOver10]

Check a few. Compare the rate and the costs to obtain that rate. Of course, the further you are away from a purchase the less accurate the info will be (rates today are not going to be the same next year for example - they change all the time). So do your comparisons contemporaneously (same day).

Get referrals from your Realtor and from friends and family that have recently obtained a mortgage. IMO stay away from the big box banks. Get a correspondent lender/mortgage banker that funds their own loans.

[kimmiller112]

The prequalification doesn't take long (I went through a broker, then through the preferred lender for the house I am building and both came back within an hour), so you should be able to get pre-qualified same day or next day.  They will ask you questions like income, time on job, what you are currently paying for rent/bills, and they will pull your credit.  The actual application for the loan will take longer as it goes through underwriting (mine took three weeks and came back with two easy conditions - verification of addresses for previous two years and who I was using for homeowner's insurance).  They will want bank statements, paystubs, etc at that point.

You need the prequalification before looking at houses. I have a very good friend who is a real estate agent, so I asked him for a referral for who to go through for a mortgage and went to that guy first.  After deciding to check into building a house, I went though the builder's lender because they were offering to pay some of the closing costs.  If any of your friends/coworkers/neighbors/family have closed on a house recently or if you know who you will be using as your real estate agent, see who they recommend.  If you happen to do your banking with a credit union, check with them.  It doesn't hurt to check at a couple of places.  

[StartingOver10]

^^^One comment to the above, it is far better to work with a lender that requires your documentation upfront, even for the pre-approval.

A pre-qualification with no documentation is nothing but a credit approval and it will make your purchase experience more difficult on the front end. For example, you make an offer and supply your PQ that has no verification of any documentation. The other buyer(s)  in a mulitple offer situation supplied their pre-approval with review of full documentation. Who's deal is going to lose? The one with a credit approval only. Believe me, it makes a difference, especially in a low inventory market.

Take the extra step to provide your documentation right up front so you have a strong pre-approval and not just a credit approval.

[laella]

Thank you all for your helpful answers.

It sounds like getting pre-approved with all the right documents in place works.

Oddly enough (friends) are the ones telling me I will never get approved making under 100K being single with a minimum amount of credit cards and alot of credit for that matter.

I do belong to a credit union so I can ask them and shop around.

I have more questions

1. If you ever paid your taxes late (single with minimal deductions) will this be counted against you?

2. Can you apply for a pre-approved mortgage loan from multiple places?

[laella]

3. Can you apply for a pre-approved mortgage loan from multiple places at the same time?

[StartingOver10]

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@laella wrote:

3. Can you apply for a pre-approved mortgage loan from multiple places at the same time?

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Yes you can apply to multiple lenders at the same time. Note: they will see that you applied with others because it will show on the inquiries. Use it to your advantage.

Also, if you are current on your taxes they won't hold it against you that you paid your taxes late one time or two times. They might ask for a letter of explanation if the late payment on your taxes was recent, otherwise it isn't an issue.

[laella]

More questions.

Ladies and Gentlemen - thank you for your informative and helpful information thus far. I am currently at SS.  Searching and Saving before going for this pre-approved mortgage.

Few more questions.

1. When applying for this mortgage besides standard documents do I need (or should I ) bring letters of reference whether business related or personal. I can do this with no issues but I wanted to ask.

2.  I am assuming the mortgage company (lender) willl have to do background on me which is fine. No issues with all of that but wondering are they going to have paper work for my employer to sign or is there more of a detailed conversation with my employer?  I am pretty private when it comes to certain things and I am assuming a few people at work may see this information.

Just wondering.