- Find a Real Estate Professional
- Realtors®
- Mortgage Lenders
- Home Improvement Pros
- Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- Popular
- Real Estate Market Reports
- More
Answers (16)
- Jeff Thomas, "MortgagesInVirginia"
- Contributions:118
Talk with your friends, family and work associates. Interview two or three either in person or over the phone. Then make a decision. In this market, professional knwoledge will most likely make the difference. The lowest rate is not always the best deal.
Jeff Thomas
Jeff Thomas
- Frank Shaw, "Under640FicoScoreLns"
- Contributions:79
Ask for GFE's, good faith estimates, to compare rate and terms and also loan programs to fit your needs the most financially. Zero down, half percent down, low fico, no fico, BK, Foreclosure, etc. all affect financing terms. Don't let them all run credit too, they may ding your fico eventually so study fast as the lender needs all the time they can while you are in escrow to process your loan for approval, docs and funding in a timely manner, usually 30-45 days in this new loan disclosure rules market. Some banks will only accept pre-approval or DU approvals from a Direct Lender too...
- Kim Barry, "kbarry6"
- Contributions:15
I think you should call around, but once you find someone you feel you can trust stick with them. A creditable mortgage company is only going to write you a pre-approval letter if they actually think they can do you loan. We spend too much time building our reputation with Realtors to risk writing a letter for borrower who won't actuality. At My Company, Allied Home Mortgage, I am the branch manager and only I can actually write the letters for my branch so you know it has really been reviewed.
A phone application is only as good as the information you provide. Always tell the lender the whole truth and do not puff your income or hours worked to get the letter. It is very important you get your chosen lender all of the income and asset paper work they ask for ASAP. We are trained to look at your income and asset information to determine if there are any potential gotchas that may keep you from getting a loan. For example 2106 employee unreimbursed expenses or wage garnishments, large deposits you cannot prove proof are yours, a lot of NSF charges. Although these may not keep you from getting the loan, but may affect the amount you qualify for.
- T.C. Whiting, "TC_at_PNC_Bank"
- Contributions:332
The more complicated your situation, the more it makes sense to get multiples. When in doubt, get several (since you probably don't know where on the spectrum you fall).
- wayne lancaster, "funds2"
- Contributions:1177
If you do your homework (getting referred to a loan officer from friend, co worker,etc. that just had a successful experience would be a good first step) and receive a Pre Approval, don't assume other lenders would also pre approve you. Unless your scenario is very "plain vanilla", there could be details of your finances that require specific investor overlays.
By asking for a pre approval letter you are asking for a commitment and should be prepared to give the same.
By asking for a pre approval letter you are asking for a commitment and should be prepared to give the same.
- Tony Murphy, "tmurphyrealtor"
- Contributions:272
One letter is fine when starting your search, you can alay shop around later when you get an accepted offer on a property or find a home that interests you.
- Norm D Plume, "America Needs Nixon!"
- Contributions:1670
everybody doesn't buy in the same pool of loans. The larger lenders don't mingle their MBS pool with pools from other lenders. You can buy an MBS pool of just WF loans, or just Chase loans, or......(etc)
- Frank Shaw, "Under640FicoScoreLns"
- Contributions:79
Furthermore, There are many factors of choosing a lender depending on individual circumstance. Some pre-approvals and DU approvals aren't worth the paper they are printed on if the client didn't furnish the documentation to back up the figures used to qualify the clients as there could be hidden problems such as schedule 2106 deductions from income which self employed clients write off and affect the bottom line net income to be used to qualify. I hope I didn't confuse you to much...
- Frank Shaw, "Under640FicoScoreLns"
- Contributions:79
You only need one. Although you may look into the many loan programs to fit your needs the best financially. For instance not all lenders offer the same or all loan programs such as the USDA Rural which is a zero down loan program for rural areas of cities like unincorporated areas requiring a minimum 620 fico, also the CHF Access which is an FHA half percent down payment purchase loan for California only which requires a minimum 580 fico, HomePath which is a purchase loan with only 10% down payment for purchase of HomePath approved financing of Fannie Mae properties for Investors non owner occupied with a minimum 620 fico, 203K loans which are for purchasing homes that need in excess of $5,000 of repairs up to the loan limit of the county purchasing in requiring minimum 580 fico up to $417,000 and 620 fico for higher loan amounts. You may want to shop a few lenders for GFE, good faith estimates, on which ones that interest you as brokers have more costs than direct lenders as there are variations of costs that can be charged including rebate from higher interest rates which goes into the loan officer pockets. You want to familiarize yourself with the rate and terms daily so that you know what they are although there are hits for fico score variations of 20 points and loan amount adjustments to the rate different from each lending instittution. There are also only some lenders that do no fico score loans with alternative credit, low as 500 fico score loans with 10% down, minimum 580 fico score loans like FMC, minimum 620-640 fico score lenders such as WF, BofA, Chase and then hard money loans which are the highest interest rates usually 8% and up although those are getting pretty competitive with low 4.5% fixed rates with large down payments held in escrow accounts as collateral.
- Deborah Garvin, "loanmonarch"
- Contributions:438
I subscribe to the "interview me, put my feet to the fire and challenge my experience and knowledge" adage. Do not, however, ask me to dedicate my work, knowledge and expertise if you are kicking tires. How may preapprovals to you need? One. If you are diligent is your evaluation and your mortgage professional is diligent is his/her evaluation.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Mike LOL. "Bob's House of Wine and Mortgages."
Happy funding, Rudi
Happy funding, Rudi
- Mike Bjork, "MortgagePlannerMike"
- Contributions:346
My suggestion is to speak to several Lenders and get PreApproved with the Lender whom you feel confident will complete your loan. Everybody is very comparable in fees and rates. There are a few reasons for this:
1.) Interest rates are derived from Mortgage Backed Securities (MBS), which the loans are packaged and sold on Wall Street (reason for Interest Rate fluctuations). Everybody buys and sells in the same pool of loans, thus essentially same interest rates.
a.) Finding Advertised Rates on Ads and Internet: These ads are there to drive phone calls. There are a lot of variations on these, like 3.75% on a Fixed Rate Mortgage. What they may not be telling you is this Fixed Rate is only Fixed for 5 years (hence, a 5/1 ARM, Fixed for 5 Years and becomes Adjustable after 5 years). Others may quote rates without any Price Adjustments (trust me, most loans will have price adjustments), or Discount Fees to buy down the interest rate. We can see interest rates change several times in a day, so those ads are not in "real" time (again, you're not receiving accurate quotes). If somebody quotes you an interest rate without receiving all of your information (credit score, property type, loan amount, percentage of downpayment, etc...), then I'd suggest looking somewhere else because this person is NOT doing their due diligence in providing you with the correct information. This bad information will create more problems for you in the long run, so it's not worth your time listening to somebody providing you (with what they think you want to hear) with otherwise bad information.
2.) Most fees, especially since April (2011), new congressional legislation new compensation laws on Loan Officers, which eliminated the Yield Spread Premium (YSP). Essentially, regardless of the interest rate, the Loan Officer will receive the 1 Point already built into the interest rate. Before, they could raise the interest rate and collect YSP and make more money; or even cut their fee in the interest rate to help the borrower. Now, the Loan Officer is no longer able to assist the Borrower with their compensation in any fashion (including possible rate lock extensions). This became Federal Law this past April.
3.) Another reason it's not good to change from the Lender whom provided your Pre-Approval is the Listing Agent and Seller become a bit concerned about the Borrower's financial credibility. They begin to wonder if the Borrower is actually qualified to purchase their property; and may not provide any leniency on any requests for extensions on releasing contingency removal to allow the new Lender time to provide the Loan Approval.
I hope this is helpful and provides a different perspective to your thoughts on the home buying process. Good luck to you!
1.) Interest rates are derived from Mortgage Backed Securities (MBS), which the loans are packaged and sold on Wall Street (reason for Interest Rate fluctuations). Everybody buys and sells in the same pool of loans, thus essentially same interest rates.
a.) Finding Advertised Rates on Ads and Internet: These ads are there to drive phone calls. There are a lot of variations on these, like 3.75% on a Fixed Rate Mortgage. What they may not be telling you is this Fixed Rate is only Fixed for 5 years (hence, a 5/1 ARM, Fixed for 5 Years and becomes Adjustable after 5 years). Others may quote rates without any Price Adjustments (trust me, most loans will have price adjustments), or Discount Fees to buy down the interest rate. We can see interest rates change several times in a day, so those ads are not in "real" time (again, you're not receiving accurate quotes). If somebody quotes you an interest rate without receiving all of your information (credit score, property type, loan amount, percentage of downpayment, etc...), then I'd suggest looking somewhere else because this person is NOT doing their due diligence in providing you with the correct information. This bad information will create more problems for you in the long run, so it's not worth your time listening to somebody providing you (with what they think you want to hear) with otherwise bad information.
2.) Most fees, especially since April (2011), new congressional legislation new compensation laws on Loan Officers, which eliminated the Yield Spread Premium (YSP). Essentially, regardless of the interest rate, the Loan Officer will receive the 1 Point already built into the interest rate. Before, they could raise the interest rate and collect YSP and make more money; or even cut their fee in the interest rate to help the borrower. Now, the Loan Officer is no longer able to assist the Borrower with their compensation in any fashion (including possible rate lock extensions). This became Federal Law this past April.
3.) Another reason it's not good to change from the Lender whom provided your Pre-Approval is the Listing Agent and Seller become a bit concerned about the Borrower's financial credibility. They begin to wonder if the Borrower is actually qualified to purchase their property; and may not provide any leniency on any requests for extensions on releasing contingency removal to allow the new Lender time to provide the Loan Approval.
I hope this is helpful and provides a different perspective to your thoughts on the home buying process. Good luck to you!
- Jason Nowak, "jnowak1027"
- Contributions:80
if your offer is accepted and you've changed lenders from the one that issued you the pre-approval, the realtors will most likely request a new one from the new lender. It doesnt change anything in terms of your offer, you are just getting a better loan. Keep in mind that once you find the home and your lender issues a GFE, those fees are set. Up to that point, it is all theory and I would much rather issue a pre-approval with the client's understanding that things are better than what is being shown than to issue a best case scenario approval and be forced to scramble should rates change, underwriting change and force the file to be moved to another investor or imply that a borrower is qualified to purchase at a higher price than what we can document.
- DiamondFundingCorp
- Contributions:454
When you are close to finding a property, get yourself checked out by the lender you will ultimately choose. Some pre-approvals are not worth the paper they are printed on.
Flagship Mortgage will not only pull credit but run you through automated underwriting. This is a big step.
Flagship Mortgage will not only pull credit but run you through automated underwriting. This is a big step.
- moyfzr
- Contributions:6
Thanks Michael.
If I am pre approve for X amount of dollars but the bank charges high fee and higher rates than other bank. Do I need to go to another bank and get pre approve again to bid on a house I want? How does this work if I don't like the rate or fee they are offering me. Thanks
If I am pre approve for X amount of dollars but the bank charges high fee and higher rates than other bank. Do I need to go to another bank and get pre approve again to bid on a house I want? How does this work if I don't like the rate or fee they are offering me. Thanks
- Michael Emery, "MikeEmery"
- Contributions:7298
Yes. You should need just one pre - approval letter to submit an offer. Just make sure the letter is from a reputable lender (not Bob's House of Wine and Mortgages).
And you should shop around to determine how much you are approved for, how much you are willing to spend, how much of a down payment you can afford and what kind of loan will work best for you (30 v. 15 - conventional v. FHA). You will need some of this information when submitting an offer to the sellers. Having your lender in place before submitting an offer will make the process smoother and allow you to put your best foot forward.
And you should shop around to determine how much you are approved for, how much you are willing to spend, how much of a down payment you can afford and what kind of loan will work best for you (30 v. 15 - conventional v. FHA). You will need some of this information when submitting an offer to the sellers. Having your lender in place before submitting an offer will make the process smoother and allow you to put your best foot forward.
How many institutions do I go to get a pre approval letter for 1st time buyer? Is one enough?
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.