rthomet

My fiance and I will be getting married in August and would like to buy a home once we are married. So we would be looking to buy in August or shortly beforehand.

My question is when should we go and get aproved for a loan so we can find out how much money we can borrow for a home? How far in advance of the actual purchase should we get this done? I hear it dings your credit everytime they check it so I dont want to do it several times just to find out what they will give us in terms of a loan.

Any ideas?

00111000

When me and the wife started getting serious about buying a house we bought the Nolo press book called How to buy a house in California. This book was a godsend, I understood everything the realtors/loan agents talked about from there on in. I would suggest looking into it if you live in the golden state...if not I think that the subject matter would still apply.

Nolo Press

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90degree

If you need further help feel free to PM me. I could run your credit for you if you are really serious.. (please be serious because it does cost me money to run it.. heh..) and with a bit of information I could give you a fair estimate of what the two of you could afford.

NoSoup

Haha... always sourcing eh?

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Just in case you were wondering...

rubicon

A loan pre-approval is good for about 30 days. Before the pre-approval you should run your credit report and confirm there is nothing erroneous on your history. As for the "ding" - well if you're planning to buy the house, get the loan approval and buy the house. I wouldn't sweat it.

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toverfie

the dings won't matter a bit since the bank/mortgage company doesn't really care about your score....score is more for smaller things like car or credit cards.....when you are going for a house, everything on your credit report will be discussed in great detail to determine its value as it relates to your true creditworthiness....you can have bad things on your credit report but if you have logical/reasonable (in the banks opinion) explanations, you will get the loan you can afford.....

90degree

ummm.. heh.. toverfie..

sorry but you are incorrect.. the score plays a MAJOR role in the financing of a mortgage.

90degree

such is life.


=]

toverfie

I guess I felt that my score was kind of crappy (620-640)... and I had A LOT of bad things (judgements etc.) on my credit report. My mortgage broker went through my credit line by line, told me what to fix/pay off, and had me a 30 yr fixed mortgage for 125k at 5.7% (the going rate last fall) in 60 days....Many of those bad things ended up not mattering since I resolved them with the courts and creditors even though my score never really changed. That was a year ago and my score still hasn't changed even though I have 0 credit card debt, no outstanding judgements, and am current on my child support, mortgage, utilities, etc.......My experience is completely "common man"...and I am guessing this is more your line of work...I appreciate your comments and input...

dpezzo

If my wife does not work, should I only have my name on the app and pre-approval process, or should I still include her on the app? I guess it may depend on what both our scores look like....

Thoughts?

screamincheetah

It's funny how the mortgage guys come out of the woodwork isn't it? I as well am one, so I'll take this one.

This is a preference thing. Since your wife doesn't work, then she will not be benefiting your income which can be a major influence on approval. Also anyone who is on the application as a borrower has their credit run and those scores or any derogatory credit can hurt an approval, since the lender's usually take the lower of the two borrower's scores for approvals, and would look at any lates. The only reason to have a non-earning borrower on the note is if you want/need the loan to reflect on her credit (to help boost it up). Otherwise, I'd always leave it off. It's late, and I hope I'm making sense. You can PM me if you'd like to talk more about it.

Tracybrian

Here is a realtors prospective:
You should get started as soon as you realize buying a house is what you want to do. You might be surprised at how easy it is. Really the key is to do it the first time just to know what your payments would be for a certain price so you know where to start looking.

Here is how I would go about it
Have the first loan guy run your credit, get a copy of it because its good for six months.

Let him figer out what you should put on the app to get the best loan. There are a lot of programs out there but most are looking at the same thing.

Get a good faith estimate too. This is a brake down of all the closing costs including monthly payments, taxes, and fees. A good faith insures that you wont get your loan switched on you when you are at the closing table a common thing called baiting and switching. Also you can compare loan guys with a good faith. be loyal to the original guy by asking him to match rates. Ask the next guy to meet or beat type of thing. There are a few negocated fees in there. Also with a copy of your recent credit report in hand you wont get dinged for credit checks.

Now you know how much you can afford, time for the shopping. finding a house then finding the loan can be very disappointing

aohara2001

Take advantage of the good rates while they're still available!

edmos1

also shopping your loan does not hurt your score, 1 inquery is equal to infinite inqueries with in 30 days. at least in US. Mortgage people answering above can provide more specific details.

wolf

I can tell you my wife and I just are trying to close on our first house this week. What a bitch. You think it is all going to be easy, but there are pitfalls which first time home buyers should be careful of.

First, shop around for a mortgage, don't just look at local banks, look at mortgage brokers as well, they usually have a wider range of programs vs banks which are limited to what that bank can offer. However, don't let anyone get pushy (and they will) let them know up front you are shopping around, if they say that they will not release their rates or work with you at all unless you sign on, move on.

Next, shop around for a realtor, just remember (present company excluded) next to used car salesmen, and sometimes before, some realtors are the lowest scum on the face of the planet, you think they are in it for you? NO NO NO, they are in this business for one thing, and it ain't you. Money my friend money, if they are carrying the house they get full commission which can be anywhere from 10$-15% of the price of the house. So when you see how much the houses you are looking at, take a look at 10-15 percent and it's a nice chunk of change, make 'em work for it. Screw this, "oh, I'll come to your office to sign forms", nah bro, make the lacky come to you. They're getting paid, not you. Don't let them push you around, or tell you that you're price range isn't feasible, take a look at the real estate transactions in your local paper, they usually run once a week in the local paper and usually on Saturday as that paper is usually smallest unless someone big buys the farm and a whole bunch of people actually give a fuck. Check those bad boys and see how much houses are going for, then talk to the mortgage rep and give them a bunch of numbers to run, tell them you want to see what the monthly payment would be for each price, then do out your finances and see what you can afford. Don't forget the biggies, like home owners insurance (you'll have to pay for your first year in full), closing costs (will run you between 3,000 to 5,000) see if you can get the seller to pay these. INSPECTION - MAKE SURE TO GET THE HOUSE INSPECTED BEFORE YOU BUY!!!!! I know in the back of your head you're thinking, well duh!!! Well, I saw a buddy of mine pay over 500k for his house and he didn't have it inspected, he thought because the house cost so much it must be good right? WRONG! The pipes were all lead and needed to be redone, the basement leaked like a sieve, the roof needed redoing, oh I could go on, but I won't.

My best advice is to know what you are looking for and don't let anyone tell you no, and don't let them push you around.

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DDDDave

Wolf,

Where are you at brother? , 'cause I want to work where realtors make 15%. Vacant land, sometimes 10%; most residential listings, 6 to 7%.

Let's see... at 6%, 1/2 to selling broker, 1/2 to lister; 1/2 of that to the broker, the other half to the agent. That makes 1.5% to the agent. On a $120K house that is $1,800. Pay your own car expenses (gotta drive to those folks house to get them to sign the papers), cell phone, assoc. dues, MLS fees, health insurance, social security, etc.

Sell one a month and you can call yourself a "Million dollar" producer who makes let's see -( $1,440,000 * 2% =) $28,800. Gross. Closer to $20,000 net. But it's all worth it to get to work with people who have attitudes like yours.


BTW, why do you care what the realtor makes, you don't pay it anyway?

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wolf

$20,000 for one transaction, poor you. BTW it's not the point who pays the realtor, it is the point that the realtor is getting paid, not the buyer.

It's not attitude about all realtors, some are great others aren't. Perhaps we ran into one too many bad ones. There are real jerks in all professions, sorry if I came off a little too harsh.

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braisler

I understand the fallacy of the assumption that a "million dollar producer" has got to be doing well for himself. I also get the idea that your regular agent doesn't walk away from the deal with 3-6% of your selling price. I understand that realtors have to work pretty hard for the money they earn. But honestly, if you are only managing one closing a month, shouldn't you be thinking of other work? What I object to is the "you don't pay it anyway" line that lots of realtors hand down. They seem to talk a lot about the idea that only the seller pays the realtor, so the buyer shouldn't care.

Do realtors expect us to be so naive as to think that we as buyers are not paying a higher price for a house because it is represented by a realtor? I think that many realtors get a bad name because they are the list-and-forget type. They work sellers into listing a house with them, put it up on MLS, and just sit back and wait for the commission to happen. Maybe they'll have an open house... but we all know that less than 1% of houses are sold through having an open house. An open house is really just a chance for the realtor to advertise their services and reach new potential clients.

Some real-life examples from my recent past might serve to illuminate. I recently sold my own home "by owner" to a buyer who was working without an agent. We negotiated a fair price between us. I was better off because I didn't have to pay $10K in commission to a realtor. The buyer was better off because he didn't pay an inflated price for the house. When he sells the house in 3 years or in 8 years, he will have a better profit because he was able to buy the house at a lower price than he would have paid with a realtor. It was my first FSBO and the buyer's first FSBO purchase. There were a few hangups, but the deal ultimately went through on schedule.

Along with selling our house, we were moving to a new area and buying a house. Prior to this relocation, I did contact a local realtor who helped us get our bearings in the local market. He did his job and forwarded immense amounts of listings my way. I screened all of the listings for the ones we thought were best. He drove us around to 50-60 houses in the area, though most were what I have come to refer to as "dogs of the MLS". We finally found a perfect house that was being offered FSBO. The owners were willing to pay an agent in order to get their house sold. If I was less scrupulous, I might have gone back to the owner's without my agent to make an offer. I know that this happens in cases where the seller is not willing to work with an agent. I felt that my agent had be working hard with me, and deserved to be compensated for his efforts, so I chose to work with him to close this house. I realized that doing so was going to cost me.

Let's get down to numbers. In this case, the house was being offered at $129K. I, not my realtor, did a market analysis, looked up what the seller paid for the house when they purchased, looked at local appreciation rates, searched for comparables, etc. I came up with the minimum number that the seller should be willing to take away from the sale. Without the realtor's 3%, I figured they needed to get out $121K to see the average market value with appreciation that they should expect. I won't bore you with all of the details of the negotiation, but we settled on a price of $125K. After realtor's commission, the sellers got out with $121,125. I hit pretty close to my mark. I know that without the realtor's commission hanging over the seller, I could have negotiated to $123K at least. I figure that the seller paid the realtor at the closing, but I paid in for that as well.

If I had the whole purchasing thing to do over again, I would definitely do it differently. Take a week to visit the area and canvas FSBO houses myself. I think that I could do as well or better by myself than I did with a realtor. I don't regret my decision to buy the house that I did. I just think that I would do it differently if I had another shot at it.

Sorry for the very long post. I think that I stayed fairly well on topic and I hope that some here will find my input useful.

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DDDDave

No, that would be $20K for 12 transactions.


Sorry if I seemed a little defensive but you don't see many posts defending realtors for the good job that they do every day. If people didn't see a value in the service why would they use it?

Obviously, everyone doesn't need every service but some in the industry are moving toward fee based services that allows both buyers and sellers to use only the services that they feel they need (valuation, negotiation, transaction handling, etc.).

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I am just a simple man trying to make my way in the universe...

"Go confidently in the direction of your dreams. Live the life you have imagined." - Thoreau

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Tracybrian

Very off topic.
I think the best way to find a deal is just to drive around the area and look for homes that have potental and do the tax record research then write a letter to the owner to see if they would be interested. After that find out exactly what you should offer for a fast transaction. Once you are in contract get any and all inspections do your estimates and if it still works go forward with the deal. Then set up a time line and plan for the prop. Put ads for renters asap even before the rehab. Get a good rental agreement signed finish fixing the property then sell to an invester for top dollor do a 1031 tax exchange and repeat. The problem with FSBO's is the Buyer and the Seller are both looking to get a good deal when they are both chasing the same 10k. The other problem with it is that you eliminate 99% of the market. If you just use a limited MLS service that is a little better for exposer.


My goal when listing a property is to put it a little below what market value in order to generate a "market buzz" the phones will ring off the hook for a few days. Also the key to pricing you home is that if you price it low you dont have to nego down. If you price to high you will get fewer people even considering your home and you will be nego down. Usually people can bump up the price for a home they really like. We always like to stage the home. We also get the pest inspection out of the way up front so that we can have a stronger negocation standpoint. We can get people to replace carpets and paint and spruce up and bill it all to escrow. We handle muil-offer situations which can be very tricky. We know good apprasers that will pull value on a home after we get an offer so that the buyer can qualify. After you get the offer excepted we use our full time escrow officer to keep the deal together because there are a hundred different ways a deal can fall apart. It is defently not over untill C.O.E. That stuff is important. At the same time we put out ads in tri-vally-herald and other bay area real estate newspaper sections, on our website and even on a TV show that our company puts on once a week. and also monthly publications that go out to thousands of buyers in my farm.

I think that you can sell your home yourself but it can be tough, you may get sued or you may save a few dollors, or you can choose a crappy agent who will do nothing for you but put it on the mls , or you can get the best agent you can find who has a proven marketing record, strong negocation skills. That is why real estate agents dont just disapear to the lists4less companys because we do get top value for the homes, and we do give the service people need, and we do have the industry connections that you can only develop by being in the bussiness.

My dad used to say to me all the time "Dont step over a dollor to pick up a dime"