Profile picture for mightymike20247

how long before should i get Prequalified

Hi was going to buy a home within 6 months to a year was just wondering When is the best time to get Pre-qualified
I have excellent Credit and a first time home buyer
Thanks for any Info
Mike
  • July 24 2010 - Drexel Hill
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Answers (19)

No reason to wait, this will give you a much better idea of what you can afford, and most mortgage brokers won't make you commit or charge you for a pre-approval. Get it done!
  • September 28 2010
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Shortly before you start your search to buy in earnest.
  • September 28 2010
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now
  • September 27 2010
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Mike,its up to you.Dont feel pressured to move to pre-qualifying till your ready to purchase
  • September 27 2010
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Sounds like you have the prequal/preapproval all figured out by now... Have you started the house hunt yet?  If you're looking in the Philadelphia area, please give me a call.  I work with a lot of first time buyers and would love to help you find your first place!  
  • September 27 2010
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It never hurts to have someone look at your financies to prepare to buy...To get prequalified for the actual purchase I would say 30 days prior to your planning to "possibly" (that means any possibility that could or would make an offer) making an offer.  Good luck
  • July 25 2010
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Dear Mightymike:   sounds like you are on your way to home ownership.  Prequalification is free and a great way to find out exactly where you stand.  Knowing that you have excellent great is wonderful but understanding the intimate details of a mortgage loan and the requirements is another.  You need to discuss types of financing, rates, down payment and reserve cash requirements and much more.   Find a great direct lender and get started.   You'll be a buyer agent's dream because you will know exactly how to structure your offer and will be shopping for homes that you can actually afford - wow, what a concept!
Seriously, good luck!
  • July 25 2010
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Mike,

I think you had your questions answered about pre-qualification.  Getting pre-qualified ahead of time is a good idea so that you have time to work on anything that may need to be done prior to the time to actually make the home purchase.  A few things to be aware of based on your original post and your follow up post:

"i have no Debt"
Although this seems like it would be a good thing many lenders are getting strict about the credit analysis of the customers they lend to.  Although each lender is slightly different most require a minimum of 3 debts listed on your credit history with at least 12 months.  Some lenders require those accounts to be OPEN while others dont care as long as they are somewhat recent.  Credit scores can also be impacted negatively over time if you have no debt.  The credit score is calculating your ability to pay debt so by not having any your score goes down.

"get some money for down payment
This is another reason to talk with a lender and get pre-qualified as soon as you are able.  A lender has very strict rules surrounding where your money comes from.  Lenders must document any "large" deposits shown on your bank accounts (other than payroll deposits).  "Large" is ambiguous and each lender may interpret this differently.  Be sure where you "get some money" that it is from saving your money or an acceptable source for a lender to use.

Acceptable sources include payroll, sale of goods (vehicle, furniture, house, etc) with supporting documentation (bill of sale and proof of original ownership) and gifts.  Gifts can be a bit tricky also depending on the type f mortgage you are looking to qualify for.  FHA is more flexible in the amount of the gift and your contribution.  In fact, with FHA you can get the entire down payment and closing costs from a gift.  Conventional typically requires you have 5% of your own funds into the transaction UNLESS the gift is for 20%+.  The donors of the gift are also restricted - normally to just family members.
  • July 25 2010
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Mike;

The pre-approval is usually good for 120 days as that is how long your credit report will be valid for.  Your bank statements and pay stubs have a smaller "shelf life" so depending on how long it takes to find a house, you may need to update. 

As for rates, for the most part the rate is locked on the property not the person, so you would have to find a house.  There may still be a few out there that are willing to lock the rate on a TBD property but be sure to double check the terms and any up front fees that are collected.
  • July 25 2010
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Profile picture for mightymike20247
Thanks for all the great replies I have been reading a lot of what is needed and been doing a lot of research about the whole process of buying a house so i hope when the time comes i will be ready to go

I am starting to think i might be closer then i thought i was to getting in the market
I have checked my credit score which is above the norm and i have no Debt which is a definitely a plus and a good job .
I think i just need to get some more money for a down payment

If I get pre Approved for a loan and lock in a Rate do i have a certain amount of time to get a house?
In other words do i have say 3 months to find a house before the pre approval expires???

Thanks again for all the help
Mike
  • July 25 2010
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Ideally, you should get pre-qualified before you start looking -so you have an idea of what you can afford -especially your monthly payments. Have your lener give you a "good faith estimate". Good Luck!  and if you are looking to purchase in Northern Virginia, let me know. I'd be more than happy to assist you.

Joyce
  • July 24 2010
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mightymike....It would not hurt to talk to someone now just so you can plan accordingly for when you are ready.  Closing costs can vary depending on where you are going to buy.  Philadelphia vs. outside the city vs NJ.  If you would like, click on my profile and reach out to me.  I am located in the Philadelphia Area and would be happy to chat with you for a few minutes.
  • July 24 2010
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Profile picture for Dunes....
IMO the First Pre-Qualifying you should do is learning as much about the Process, your options and the Market you are interested in...Then the next Pre-Qualifying is setting down, forcing yourself to be Honest and determining what YOU CAN AFFORD to be Committed to Financially.

Then you Pre-Qualify some Lenders and decide which one you feel comfortable with using and see if what you can AFFORD can be Financed..

Then you Pre-Qualify some Agents, Shop, Compare and begin to Pre-Approve one who you feel will Provide the Services YOU have determined you need based on your knowledge of the Market and your determination of the assistance you need.

While doing that get your Pre-Approved Lenders Advice about being Pre-Approved for a Loan ....You are the one hiring Services so do so and do so wisely..
It's gonna be YOUR Financial Commitment so make sure it's an Affordable one in THIS Market/Your Market..one you're willing to COMMIT to.

And do it knowing you chose a Lender and an Agent based on more than they were in the Phone Book or on an RE Site...Cause ya  Pre-Qualified them

Good luck
Dunes
  • July 24 2010
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Profile picture for Ofe Polack
Since you are a first time buyer, I suggest that you find yourself a buyer agent as well as a lender.  The buyer agent should be able to refer you to a few lenders.  I suggest that you obtain a pre-approval as soon as you can, the pre-qualification comes later on, although there are some lenders now that provide you with a pre-qualification upright and no pre-approval.  Just talking with the lenders will give you an idea of the various different programs available and which one will work best for you.  Patrick is right advising you not to make large purchases during the period prior to purchasing a home, but then, the lender will guide you through the pre-purchase process.  Your credit will be checked up to a few days prior to closing on the house, careful "layaway" counts as a sale too.  The best of luck! 
  • July 24 2010
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Profile picture for Reallyfedup
Sunnyview provide a good answer.  The pre approval is more important then the pre qualification and should be done closer to when you are beginning to look.  Sellers will want to see the pre approval with your offer. 

Even if you have good credit, try not to make any large purchases while you are in the approval period.  Lenders are pulling credit upto and on the day of closing and large purchases can affect debt to income ratio which lenders look at.  I've had clients with good credit go out and buy furniture for the new house only to get denied the loan at the closing because their score had changed.
  • July 24 2010
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Profile picture for mightymike20247
Thanks for the answers it helps to get them being a first time buyer
Some good info
  • July 24 2010
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Profile picture for sunnyview
You can get pre qualified at any time, but getting pre approved is a step beyond that. You shouldn't do it more than 30 days before you start to look. Start getting your paperwork together now so it is ready go. Zillow has a list of items you will need when you finally sit down with a lender here. Now is the time to also consider any items on your credit report that you can work on or polish up before you buy.

Get a copy of your credit report so you know what is on it and what your current score is. One credit report a year is free from the credit reporting agencies here, but you will have to pay a small amount for your actual credit score. Last time I looked it was about $12. You can get strategies to improve your score here and here. Have an items removed that are incorrect and take a close look at your debt to income ratio since lenders will consider that.

You can see how much you might qualify for by using a calculator like the "how much can I afford?" one here. It is a good way to start looking at the numbers so you can make a budget that you will be able to live with when you buy. 
  • July 24 2010
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Getting pre-qualified right before you start looking will provide you with the most current credit rating and interest rates.  It also ensures that you will be searching for homes that are within your monthly payment "comfort zone"!  When you find your dream home, your agent will be able to present an offer from you with a pre-qualification letter from your lender so the Seller can be certain that you have the ability to close the transaction!  Best wishes!
  • July 24 2010
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Profile picture for wetdawgs
Just before you start looking.
  • July 24 2010
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