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Order in which to approach a pre-approval, searching,. & buying

My boyfriend and I are looking to buy a home together. We our tax forms, W-2s,etc ready yet we have no clue what we could really be approved for. We spoke with a lender and he said if we get the contract we can be be approved quickly. I find that it is not logical to approach someone seriously, get under contract, and just to find that we can not get it. In my opinion, knowing what you are likely to be approved for via pre-approval first so I can automatically cross homes off my list makes more sense. I would think that it is a waste of my time, the seller's time, and the real estate agents' time if we were to pursue it his way. 

Before passing judgement too harshly I wanted to ask if this was common place; I wanted to know what the experts thought about the "best" order in which to approach buying a home. Again, how would we know even where to begin if the banks didn't give me a number to work with? 

I sincerely appreciate your help! (And its pretty urgent as we have begun the home buying process)
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February 19 - Suitland-Silver Hill
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I notice you are in PG county...has anyone told you about the MY HOME program available in PG County?  You can get up to $20k in down payment and closing cost assistance.  You should check it out:

http://www.princegeorgescountymd.gov/sites/RedevelopmentAuthority/Services/MyHome/Pages/default.aspx

This is a county government program that is available to people buying in PG County.

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February 25
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Oh my gosh, I have not received notification about all the replies! Ha! Thanks for everyone taking the time for your input-- really! A lot of "agreements" on detailed responses is definitely promising. ;-) I did my research and read that getting pre-approved is the first step, so when that lender mentioned getting under contract it threw me a curve ball (and not to mention a "red flag" for a: "look how quickly I helped sell this house!") I will go over these responses with my boyfriend and proceed from there. He has spoken with a real estate agent today so it looks like we may get on track.

Thanks so much! :-)

Have a great weekend,
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February 21
One of the first steps in buying a home would be to speak with a lender to obtain a pre-approval. The reason why this should be your first step is because most sellers won't take an offer seriously unless it has a pre-approval. So if you are serious about buying a home you should get pre-approved for a mortgage. Then you can start looking at houses and submitting offers. Since your offers will have a pre-approval they will be taken seriously. So the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
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February 21
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A gentle hint:  skip agents and lenders who can't play by the rules about self promotion and contact information.

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February 19
Getting pre-approved for a mortgage is the most important step in the process. The pre-approval will help set proper expectations upfront, and prevent you from wasting time shopping for houses out of your price range. Below you will find a list of documents you will need for the loan approval, along with some important questions you should ask yourself before buying.  If you would like to get pre-approved for a mortgage please feel free to call or email me directly.  I am a local lender, and i believe in educating my client before they dive in to the home buying process.  

Questions you should ask yourself before buying: 
- Where do you want to live? 
- Where will you be comfortable with your monthly payment (PITI)? 
- How much do you have for down payment and closing cost? 
- When are you looking to close? 

Documents needed for the loan process:
- 1 month of recent pay stubs (showing YTD income) 
- 2yrs os your most recent w2's
- 2yrs of your most recent federal tax returns (all schedules) 
- Two months of your most recent bank statements 
- Copy's of your drivers license 

Jon Wald 
Branch Manager
Loan Officer | Renovation Specialist
Primary Residential Mortgage
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February 19
At least you know which lender to stay away from!  Seriously, anyone who's been doing this awhile knows you need that pre-approval letter before you can make an offer, never mind sign a contract to purchase.  Ask anyone who's bought a home in your area in the past year or so who they worked with for Realtor and lender.  Be sure to ask if they would use those same people again.  Chances are they can refer you to someone you can talk to.  It will be a much easier home search if you find a realtor who has done a lot of business in the neighborhood you want.  A good lender can refer you to a good realtor, and vice versa. You need a good team working for you, because you're spending A LOT of money, so be careful and trust your instincts.  If you don't know anyone, or you are new to the area, Zillow has great lists of agents, by city and town, so you can find a local expert that way.  The testimonials are very helpful.   
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February 19
I agree with John.  I would  highly recommend meeting with several buyers agents and find one that will take the time to set an appointment with you, sit down and explain the entire process and then ask them for a mortgage recommendation.  If you call agents and the first thing they want to do is show you houses, they are more concerned about the sale than you.  

A great test is to call agents and simply ask to go look at a house.  Everyone that tries to show you that house, is not interested in making sure you are taken care of.  Go with the one that wants an appointment first (in office, coffee shop, restaurant, etc) and is willing to take an hour to explain the entire home buying process.  That is when an agent is doing what we are hired to do and serving you.  Anyone can open doors, a qualified buyers agent REPRESENTS you.  They will also have a mortgage professional that they trust and they will be more than happy to make the recommendation. 
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February 19
You're doing fine.

Really, it doesn't matter if you talk to a Realtor® or a loan officer first, just so long as you talk to both of them before buying!

Congratulations, and all the best!
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February 19
I agree with Jim, you should find a good buyers agent. Most buyers don't even realize that they can contract with a buyers agent and it won't cost them anything. Of course its usually an exclusive agency arrangement but working with one really good buyers agent can save you lots of headaches, offer great advice and in the end make sure you don't over pay and that the transaction goes as smooth as possible.
Specifically most agents have preferred lenders that they work with and that they know will treat and service their clients right. An agent has a vested interest in making sure you get the right advice and help that you need. They can also help you with insurance, inspections and a myriad of other services that you will need during the home buying process. Trust me, agents know the best service providers in their local area as they can't afford the damage to their reputation if they recommend bad ones. (No, agents do not get kickbacks from these referrals, by law they are not allowed to take them even if they were offered)
Again, remember, the buyer agent gets paid by the seller in nearly all cases.
Call your [promotion deleted by Zillow moderator] nd ask for their best buyers agent. You won't sorry. If you need help getting the right agent, I would be more than glad to help you. 
Jeff - KW Realtor
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February 19
I also agree with your other posts, but should you contact an agent first, most agents will wish to know how much you can afford as well! So most likely, the agent will ask you to contact a mortgage professional to go over all your documents and come up with a price range comfort zone for you.
Not being privy to your full discussions with the lender, it seems they might have not taken time to go over with you the various loan products and most importantly, total costs and monthly payments available to you. I think you are doing the right thing reaching out to the Zillow community and getting feed back.
Good luck in the home buying process. We are a locally headquarted National Federal Savings Bank and stand ready to help you in this process should you choose.
Best wishes, Jim
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February 19
I would also agree with John Maranto that the first step in your process is becoming pre-approved.  You should know prior to becoming "under contract" what your affordability is and what the purchase means in terms of both payment and total cash needed.  It's not just your down payment, but you have closing costs and pre-pays (insurance and property taxes) too.  We will be able to let you know prior to writing an offer to buy what it means.  Buying a $250,000 home in Baltimore City is different than that same price point in the surrounding counties.  The property tax rates are different, so the same priced home will have different payments and closing costs.

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February 19
You are correct. Before going to look at homes you want to speak with a lender to understand how much home you and your boyfriend can afford, what loan options are available to you, what your estimated closing costs could be, and what grants you may qualify for to help you purchase your home.  Many buyers have a tendency to approach the lending conversation from the perspective of what they want their monthly mortgage payment to be.  I find it more helpful if you let the lender tell you the maximum you can afford and what your monthly payment would be at different mortgage amounts.  This information is useful because it will allow you to adjust your search parameters if you do not find a suitable home at your predetermined price ceiling.

Once you have this information you can then work with a realtor to set up your home search parameters and get your home buying questions answered.[promotion and contact information deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
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February 19
 
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