When to start mortgage pre-qual?
Hi All, I was wondering what your thoughts were on when I should start my mortgage pre-qualification and other paperwork. We’re in the early stages of buying a place, and are still looking at properties… haven’t quite found anything we want to put an offer in on. I’ve been told your credit report is only…
Hi All,
I was wondering what your thoughts were on when I should start my mortgage pre-qualification and other paperwork.
We’re in the early stages of buying a place, and are still looking at properties… haven’t quite found anything we want to put an offer in on. I’ve been told your credit report is only good for 30-60 days (depending on who you talk to), and I’m not sure we’ll find anything in that time frame so I don’t want my credit pulled unneccessarily too many times in case we don’t find anything we like in the next month or so.
On the other hand, I’ve heard that the whole mortgage process is just taking longer now, with lenders scrutinizing credit, employment history, tax returns, etc etc very closely.
Should we get the process started sooner rather than later because everyhting is going to take longer? Or should we just wait until we think we’ve found a place we like. I feel like in this market it’s highly unlikely we’ll be getting into bidding wars, and don’t feel like I need to have a prequal letter at an open house. But at the same time, we don’t want to miss out on buying a place we like because the paperwork took too long.
experiences?
brooklynstyle- send me an email, I’ll get you the letter.
adahill@approvedfunding.com
Thanks to everyone for their comments and advice! So far I’ve talked to two mortgage brokers and my bank. The loan officer at my bank (ShitiBank) wouldn’t give me a pre-qual letter w/o pulling my credit. They verbally told me what I would qualify for based on my self-reported info, but wouldn’t give me a letter. That’s when I realized that lenders are being a LOT more strict than they were just a few years ago. Anyone know if Citi is just more strict than other banks in this regard?
I really had no intention of going through Citi — they are just a terrible bank — they were just a starting point so I wasn’t too worried that they wouldn’t give me a letter to use when shopping around. I haven’t sent any of the brokers my financials since I wanted to do a bit more shopping around before deciding whether to go through another bank or a broker but perhaps I should just pick someone to give me a letter and then continue to do some shopping on the side? Unfortunately my credit union that I love only finances home purchases in PA and NJ.
We should have enough for the 20% so hopefully that will speed things up a little. Thanks again… We’re seeing a few more places tomorrow so I’ll get all my paperwork together tonight!
Yes, we are under CommunityWorks.
The other banks don’t seem to advertise that program as much.
Translation, are you under the communityworks program? That is subsidized program that they have as well as other banks.
What I don’t like about them is that they will not assign their loans and keep their clients hostage. If they deny your loan and you have another bank that will do it they still will not assign your loan. I have 3 current clients that were denied a loan from HSBC that came to me for a loan and they are forced to pay an ungodly amount of additional fees because of this.
500k x 1.8% Mtg Tax = $9,000 in additional costs.
How about 900k x 1.8% Mtg Tax = $16,200
They are one of only a few banks that will not assign. All the rest do. It is a highly despicable practice that we are trying to get the attorney general of NY to look into.
Feel free to carry a torch for them, but I think they are a horrible organization. BUYER BEWARE!!!!
I don’t have a link or transcript. Not even sure if they will report it yet. Talked to the reporter about 2 weeks ago.
Adam,
I got my mortgage from HSBC and refinanced twice with them.
Nobody can beat them in terms of interest rates from my experience (last refinance at 4.375% in mid-June 2009). So it was actually not a problem staying with them for the refinances.
Do you have a link to a transcription of your phone interview?
Thanks.
You can get a pre-qualification letter in one phone call as long as you are not lying to the loan officer. I would suggest pulling your credit now in case there are any issues on your report that you are not privy to. It takes a few weeks sometimes to remove inaccurate information and the lenders now penalize you if your fico score is less than 720.
I am a direct lender and post reguarly on this site. Feel free to give me a call or send me an email.
adahill@approvedfunding.com
I would stay away from HSBC if you are buying a house or a condo as they will not assign their loans to another bank aka CEMA. If you need to refinance in the future you would need to pay the mortgage tax all over again unless you work with them again. They basicaly hold you hostage. I did a telephone interview with Bloomberg news about HSBC.
The seller will definitely take you more seriously if you have a pre-qualification letter. Some real estate brokers wouldn’t even show you their listed properties unless you have a pre-qualification letter.
As Serpentor pointed out, the loan officer doesn’t need to pull your credit in order to give you a pre-qualification letter. Based on the information you will provide (latest credit score, monthly income, savings) he will give you an estimate of how much you can afford, which may help to narrow down your search.
After you get your letter and while you are going to open houses you should work on getting all your paperwork together: paystubs, W2s, tax returns, …
We took a year after our first pre-qualification letter to find the property we purchased. We talked to several banks and several mortgage brokers at that time. We eventually got a loan from HSBC that I highly recommend.
Good luck!
Definitely get a pre-qual letter ASAP if you’re serious about buying. I’m in contract on a place and going through the mortgage process now and I found that when making bids having a pre-qual letter was necessary (lets the seller know that you’re serious and have done your homework). You can get this through a mortgage broker. It will take them less than a day to get one together for you (you just let them know all of financial info). If you get a prequal letter through a broker when you make a bid they can re-write the pre-qual letter so that it matches the exact amount your bidding for (if you do it through a bank I don’t know that they would re-write the letter every time you make a bid like a broker but not sure). Note that pre-qual is different than pre-approval which can take several weeks. Pre-approval is the stronger of the two but I found that pre-qual was fine. Also using a broker for pre-qual was really helpful to me because seller’s brokers were very familiar with agents in my mortgage brokerage (Universal Mortgage) so it strengthened my offer to have the broker speaking on my behalf.
Good luck!!
We walked into our bank to get a prequalification letter. I think we’d pulled our credit a year or two prior and the loan officer basically said “if you’re not lying about your credit, your income or your savings, this is what we’d lend you.”
That is all you need to make an offer.
The mortgage itself you can get on a schedule if you’re on top of it. Once your offer is accepted, get the paperwork started and keep track of it so it doesn’t stall someplace, but you have to do that no matter what.
The only other piece of advice I’ve got is to make sure you *have* all your paperwork now.