Profile picture for TMP828

Should I get a pre-approval before making an offer on a house?

I previously submitted an offer on a house with a pre-qual letter from my broker.  I had completed the loan application but my broker have not processed my application.  Her reason being that I don't have an accepted offer yet and that pre-approval will not be valid 3-4 months with the rate constantly changing.

Please help me understand the following
- Should I get multiple GFE and get pre-approval with 2 best offers?
- Should I get a pre-app before making offer? How long is a pre-approval good for?   - Will my loan app get reprocessed if I can't find a house 3-4 months from now?
- How my credit score will be affected if these loan processes and credit pulls occur out of the 30 days range.

Thanks for reading!
  • July 01 2009 - San Diego
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Answers (7)

Multiple pre-approval are not necessary, but talking to multiple lenders/brokers to get estimate is smart.   If you are planning to shop the loan, you should let the one you choose for pre-approval be aware of your plans.

You definitely should have ONE pre-approval.  Seller isn't likely to accept or even consider your offer without one.

Time frame isn't a major concern, it is easy to update the approvals assuming everything has remained the same.  Excessive credit pulls can hurt over a long period of time.  So pick whomever you feel best about to work primarily on your credit and approval. 

You will find that when it does come time to lock, everyone pretty much works off the same available terms, and wide variances of offerings are unusal if you compare apples to apples on GFE 1 vs GFE 2.
  • July 01 2009
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TMP,

DO not overwhelm yourself with worry about pulls, scores,etc.  Find a lender you like period.  I take it that you are a worthy borrower.  With that said, then seek to find a home and "close" within a reasonable time period.  4 months is not reasonable so it really is a waste of time to upload a file that will "spoil" like milk prior to your closing.  You need to get frisky and ready in a 60 day time window for example.  Take this time to interview and select (no credit reports needed for that) just your interviewing hat.  Pick one and then do the same with a RE pro.. pick one.. then you have your team (like employees).  I hate paying people I can't stand.  Just replaced my mechanic for that reason.  He was the "cheapest" (I guess), but had more issues and really didn't do the job really right....  So, I will find another one and never look back.  Find the best and stick with them unless they betray you.  Good luck and with CA RE right now????... no rush is right.
  • July 01 2009
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Profile picture for wetdawgs
The others have good points.

Very few sellers will accept your offer if you don't have a pre-approval, therefore, while you are worrying about pulls etc affecting credit score, consider lack of pre-approval a show stopper.   Many agents will also not take the time to show you homes if you are not pre-approved.



  • July 01 2009
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As WD says.. BIG difference between a Prequal letter (loan officer's opinion) and a real Pre-approval letter.  If you select your lending partner.. you would only have 1 pull anyway... if you shotgun yourself out there...... that is a totally different story.  Again, good luck.
  • July 01 2009
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If I may add, pre-approval does not necessarily means that one may not face hurdles of loan approval process once you are in escrow.  Need to make sure that you select folks/institutions who will make things happen and not leave you at a mercy of someone else indicating it is out of their hands.

Waseem-
  • July 04 2009
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Profile picture for FinancialResources
Best wishes on the upcoming purchase.....

The largest concern of a seller is entering into a contract, packing up their belongings, hiring the U-Haul truck...and then find out the buyer can't close the deal.

This gives you LEVERAGE during negotiations, as a PRE-APPROVED borrower is as good as a cash borrower. No worries for the seller....

As Mr Sufi mentioned it is generally pretty easy to update the Pre-Approval if you don't find a home quickly. The key is not
to accrue additional debt during this period.
  • July 04 2009
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yes you should run your credit from website and give them a copy and thell them to don't run your credit again. good luck.
  • July 05 2009
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