The Mortgage Process

[cdpk]

How far in advance do you go to the bank to begin a mortgage? I would like to know a proper or reasonable amount of time in advance of buying house that you go in and talk to a bank as to how much a person can borrow. I would not be looking to buy a house for about a year and would likely talk to a banker in advance of actually looking for a home, so I know how much I can afford. What is a time line for this?

[DakB]

30-60 days. The bank approves you first then they approve the property afterwards. You could do it early but, they will just be a pain and make you reconfirm everything that you had to do in the first place all over again at the end so I don't recommend doing it any earlier than this.

[the lion and the bee]

It depends on several things: your credit, the bank's resources,the ability of your loan officer, the size of the loan, the type of loan you are getting, and the appraisal of the subject property However, based usually on the way real estate purchase contracts are written, they vary most commonly from 45 to 60 days. My answer is based on my experience as a real estate investor and some year i practiced as a california realtor.

[EveryonelikesBob]

Get a credit report now. Look for errors and clean up any problems.Go to a first time home buyers class run by a non-profit most cities have them.Stop at a few mortgage companies 2 months before you are ready. Try to hit a few in 2-3 days. The inquires on your credit report will get bunch together and not affect your score by much.Don't forget to save as much as you can for a down payment.There is nothing wrong with talking to realtors now.

[love to learn]

well, you sure have it right! i will not work with ANY buyer unless i already know their financial situation and what they can afford to buy. why? why would i want to waste my time, or your time, hauling you all over town to see houses that you cannot afford? or, do you think i want to lose my reputation if i talk you into buying a house, on some wild creative finance scheme, that is going to bring you into foreclosure? would you send me your friends if i did that? your best bet is to look in the sunday newspaper, or, the internet, to see which lenders in your area (newspaper) are charging essentially the same interest and points for it (based on a 30 year, fixed rate loan--which you can always pay down before it expires, before you spend at least 3X the principal balance on...). if the bank that you do business with is one of them, call to schedule an interview with one of its mortgage bankers. it's actually a lot of fun. why? because there are ALL TYPES of mortgage plans, and you want to be very knowledgeable about each one of them before you start to look, so that what you write into your offer will be realistic. when it is time to buy (too bad it is not now, because this is the biggest and longest buyer's market i have ever seen!), you find a caring, reputable, honest, ethical real estate broker or agent with many years experience, and who will easily explain to you what "agency" means to you, both single and dual. don't take the mega-million producer: do you think she will have any time for you? the time that you apply for the loan is outlined in your contract. most home buyers should pay for a home inspection and definitely have a real estate lawyer (unless your state closes in escrow, like CA). you have to stage the dates so that your home inspection is completed and the time for the attorneys to bat out any issues in wording in the contract by one business day for when you walk into the bank with your signed contract and anything else it wants. (you will have, of course, after going through the initial work you are doing right now, get a letter of pre-approval at the time you begin to look, because sellers want to see your qualifications with your offer). have your agent go over the wording of the contingencies for mortgage, home inspection, and attorney approval so that you time it all correctly. ask your lender how soon your loan can be approved. go in as fast as you can after you have a contract. should your home inspector find major problems, ask your attorney, not the agent (unless you trust her to talk with your lawyer, which you SHOULD) to put out a letter agreement for the sellers to fix these problems, not you. why should you take a monetary credit to fix them at closing? the expenses may very well be higher than your credit. besides, you have a job. you have a life. make a seller fix structural elements that can cause you problems, or else get out of the deal. i wish you well. you are quite smart in doing what you are doing now. (please try not to take an "ARM" of any type!)

[ask927]

As a mortgage broker, I can tell you that you want to avoid having your credit pulled more than needed and your report is only good for a max of 4 months before it would have to be repulled... I have seen repulls affect scores by upto 20 points which could really hurt your rate or make it impossible for you to obtain the kind of financing you need and most bankers will require your credit be pulled before talking numbers.I would say no more than 4 months for that reason alone. You always want to give us at least 30 days, preferably 45 to get a mortgage done... In the meantime, you can figure out what you can afford by yourself. The general rule of thumb is that you take your gross monthly income and divide it in half. That should cover all of your debt and your new mortgage payment including your taxes. You could estimate around $700/month on every 100K you spend on a home with the rates the way they are right now, so if you do the math yourself, you could have an idea of the price range you should be looking in. My advice to you though, is that if you are a year away from purchasing a home, order your free credit report from the 3 credit beareaus, Experian, Equifax and Transunion (you are entitled to one free report per year, though you won't have access to your scores), your personal inquiry will not affect your score. The main factor in obtaining a mortgage is your credit score so you want to make sure that is in order and you can start working on it now if you need to.Good Luck