Question: What should my husband and i do prior to seeking pre-approval on a home loan?

(Posted by: MP on 2010-03-08 07:51:37)

We plan to begin the process in August so about 6 months from now. Any advice on things we should do or not do from now until then. Besides saving money. Any advice is helpful!

Posted by: Beaux Bells on 2010-03-08, 07:54:51

Have you printed out your credit reports from annual credit report .com They are 100% free - approved by the feds. Never consider paying for your reports. If they are in pristine condition get your score (you and hubby's) from myfico.com Note: Major lenders like FHA do not go by the score. They view the reports in detail and make their own decisions. But it is a good guide for you to know where you stand. Do you have any credit card debt? Pay it off in full, and watch your score take a boost. Credit card debt is extremely harmfull for your credit worthiness. Do not open any new credit cards or make new loans. New credit affects the score for the first 6 months. Do not close old accounts, it will reduce your overall available unused limits. Do not consider going by the maximum the lender will tell you that you can afford in a home. After all you want to be able to put food on the table. Do not do any loans that are variable (scams), stick to fixed. Figure out what 25% of your take home pay is. That will be a comfortable monthly amount so you can afford to take vacations someday. /

Posted by: Questor on 2010-03-08, 07:52:57

Figure out exactly how much you can afford to spend every month on mortgage payments for the next 30 years.

Posted by: singlecountrygent on 2010-03-08, 07:55:54

Make sure your payments don't exceed 10% of your gross income. payments such as,,credit card mims, car payments etc. banks don't count utilities. banks like to see your house payment and bills not exceed 37% of your monthly gross. one large carpayment can knock most ppl out from qualifing for a home loan.

Posted by: golferwhoworks on 2010-03-08, 07:56:19

Document any large deposits going into any account and save pay stubs as you will need a full month to get started. Clear up any bad things in your credit file if need be as well. Keep any stock or 401K statements as well. Also take with you to the meeting with the mortgage professional a copy of your SS cards and drivers licenses I am a mortgage banker in TN

Posted by: Tiny Dan on 2010-03-08, 07:58:25

It is cheaper and easier to rent, if you must buy tell the bank you can afford 300 dollars less a month than you can because at closing they will come up with all these extra charges to raise your monthly payment. oh the bank didnt tell you because technically the money goes to someone else. of course nothing is the banks fault. my lender told me my house would cost me 500, guess what it was 700 at closing and now the taxes went up so it is 750, so my house the bank told me was 500 costs me 750 like clockwork , is that just fantastic or what, and oh it isnt the banks fault , it is other charges that they justconveniently did not mention so i would borrow as much as they could squeeze out of me. the nicest building in town is the frigging bank , go figure.

Posted by: Steve D on 2010-03-08, 07:58:54

Check your credit reports - make sure they are as clean as they can be and there are no mistakes. If you find anything wrong, dispute it. Save money - the more down, the better chance you will have of getting approved. Sit down with your finances and draw up a budget and honestly determine what you can afford. Don't forget utilities, etc. Use a mortgage calculator to get P &I payments and then add in homeowners and property taxes. Many people usually qualify for more than they actually can afford. Once you know how much you are comfortable with, write that number down and when you go looking, make sure that the real estate agent stays at or below that amount when showing houses (they will try to show you more expensive houses in hopes you will fall in love with something you can qualify for but maybe not afford, since they work on commission). In addition to being honest, be realistic - if you buy that fixer-upper, can you really do the repairs yourself? If you buy that 2 acre yard, are you going to have time to do the yard work? Go to the library and educate yourself on mortgages, housing costs, etc. The more you know, the less disadvantage you will be at.

Posted by: wh1te_diamond08 on 2010-03-08, 08:02:28

Research the lender and it's investor and possable loan servicers they work with which you may be sold to right away after getting approved.always get fixed loan and stay away from GRP,SELECTPROFOLIO,DLJ,CASTLEPOINT,COUNTRYWIDE.INVESTIGATE everything about company you will have to pay your payments to and investigate the inspector for your home most look like they know what the are doing but dont! turn on every faucet,structual beams.colmns,electric,pipes,roof,get history on house from city my home came with a well on property i was not told about and two previous fires also dont be scared touch look at and under everything and do lots background history checks everything.

Posted by: godged on 2010-03-08, 08:13:35

Do not open new lines of credit, buy anything on credit such as a car, do not change jobs (unless it is for more money and within the same field). Save, save, save. Do not go to sources such a Lending Tree, when you fill out the information there, they disperse your information to many lenders, all pull a credit check, and when your credit is checked for a potential new loan, it can effect/ lower your credit score. This can go on for quite some time, I know a couple that used Lending Tree and got solicitations for loans for months and months after using that service, lost about 100 points on their credit score. Pay everything on time. Some people think that paying extra will help their credit score, but it does not. Pay on time, and instead of paying a little extra, save that money. It may be a good idea to sit down with a local lender now and see where you are. A good lender can give you suggestions on how to get yourself in a position to buy.

Posted by: Doctor Deth on 2010-03-08, 11:23:52

Pay down debts as much as possible and save as musch money as possible - you may need 10-20% of the house price in cash

Posted by: MaryM on 2010-03-08, 15:04:20

Everyone else seems to have covered the money and credit side of things. I'll give you some tips on what to look for in a property... Firstly decide on where it is you want to buy - city, country, coastal? Then what - house, apartment, unit? Then make a list of features you want your home to have - garage, deck, backyard, view, BIRs, ensuite, etc. Then highlight the ones that you are willing to be flexible with, and circle one feature you definitely want. I highly recommend ensuring your home has one special feature. Once you find a property, visit the house and neighbourhood at different times of day and night. Are you happy with what you see? Is it a sleepy street during the day, but comes alive at night? Are there schools, shops, transport, parks, cafes in the area? Is the house sound? If you have any doubts hire building and pest inspectors to view the property? Is the area safe? Is the house and land suitable for your stage in life? Do you have children who require space to play? Think about the detail of the house. Are there enough bedrooms? Do you like the garden? Is there much traffic noise? Is it suitable for pets? Is it secure? Check under the house, is it dry? Is it insulated? Are the drains clear? Will you have easy access to friends, family, work, recreation?