Pre-Qualifying for a mortgage loan question.

[TBone.sixpack]

My wife and I will soon be relocating and house shopping. We would like to know our buying power. Is pre-qualifying for a loan essentially starting the loan process? We don’t want to dive into all of that at this point.

We want to know our shopping range, but don’t want lenders all over us this early in the process. Any thoughts are appreciated.

 

[Cooterpoot]

House payment should be no more than 20% of your income. Don't fool with prequalifying if your credit is good and you aren't loaded with debt.

 

[TBone.sixpack]

20% is right at the note we are comfortable with. We should be good, but the wife wants a range. I told her we will qualify for more than I am willing to pay.

 

[horshack.sixpack]

Mortgage companies don’t care if you tithe, eat, drive, have health insurance, etc. They will qualify you for way more than you ever want to pay. Be sure you understand expected taxes, insurance, homeowner association dues and that you have savings that will support emergency maintenance on major items, particularly if the house is old.

 

[TBone.sixpack]

Agreed. I have no doubt they will give us more than we need. I just need to salve her fears. Hear you in the safety net fund too. It’s a must. Where we are moving we will be paying way more than any of the houses are worth. Which sucks, but it’s where the opportunity is. I have one last big move in me. I have moved so many times in my life and I am over it.

 

[patdog]

I told her we will qualify for more than I am willing to pay.

You are a smart man. No real advice other than the 20% others have mentioned is pretty good advice. Also, go 15 years if you can. Or if you go 30, gradually start making additional principal payments so you can pay it off in 20 year or so. Good luck.

 

[BriantheDawg]

Yes, this is the starting point. Your credit report is good for 120 days...so as long as you close within that timeframe, credit would only need to be pulled once. If not - not that big of a deal - you will simply have to have credit pulled again and will be subject to whatever the new score is.

As for the amount you’d prequalify to get, I ask my clients what purchase price range they’re looking to be ...and will send the PreApproval Letter accordingly, provided everything checks out on the loan application. That doesn’t necessarily mean that’s the “max” you’d qualify, however.

I’d be glad to discuss further and answer any questions you have - DM if so.

 

[aTotal360]

Get pre-approved. Not pre-qualified. I rarely even consider pre-qual letters for my sellers if we are in a multiple offer situation. They just tell me you have a pulse and might have a job.

Getting your lending figured out is THE most important part in home buying/shopping. A good house won't last very long on the market. The day or so you spend gathering documents to get to lender, is the day you lose the house.

FYI "not wanting lenders all over you" tells me you aren't serious yet. Which is fine. When you are genuinely ready, find a local lender that you can talk to. Not a "big box" lender.

And going for the absolutely lowest rate isn't always the best option. Trying to save $13/month (cost of lunch) may screw you when the sellers need more information on your creditworthyness and they can't get the call center in India to answer their questions. Don't go cheap when you are buying a primary residence.

Depending on the situation, I advice my clients to look at the SUREST offer, not the one the yields the most money when the offers are only a couple 1000 apart.

I am a full time realtor, if you have any questions, pm me. I'll be glad to help you any way I can.

 

[TBone.sixpack]

Thank you!

 

[TBone.sixpack]

It’s in the Middle Tn area so to say it’s a sellers market is the understatement of the century.

Thanks to you and BrianTheDawg.

 

[TBone.sixpack]

To add. Every house we have found that we liked was sold as soon as we inquired. That’s how fast they are going. And I know the bubble is gonna burst there. I want to buy as smart as I can to hedge against that.

 

[rumsearch]

If it’s a new area to you and the market is seller friendly right now,

Consider renting for a while. Lets you learn the area and lets the market calm down. Worse real estate decision we ever made was when we moved to a new area and bought. Market was at or near the top (Florida gulf coast 2005’ish). Market crashed and had to relo again within a year or so.

 

[TBone.sixpack]

It’s where I have lived from 1994-2017. Just going back. It’s the Nashville area, but we are going to live on the out skirts. The opportunity is based in Brentwood but we are willing to be 30-40 miles out to get more land/house.

Either way we are going to over pay. That area has gone full crazy real estate wise. I still love Nashville but I prefer late 90’s early 2000’s Nashville to what it is now. When I moved there in 94 I fell in love with the area.