Your Questions About Home Loan Pre-approval

Robert asks…

Can my FHA loan still be denied after Pre- Approval?

I am getting a House Newly built , and gone through the underwritter proccess , I got approved subject to a satisfactory Appraisal , Proof of fund to close ( Which is not a probelem ) ,Updated pay stubs and asked to provide who i will be getting my Home owners Insurance with . The part am scared of is the Apprisal am thinking for a newly built house there should not be a problem .. I might be wrong but am just paranoid

John answers:

A pre-approval is not an approval. It’s just saying if everything is as stated and nothing changes your loan will be approved. So if the house doesn’t appraise it could be denied. If the rates go up & you no longer qualify based on debt to income you could be denied. If you buy something new on credit & payments go up you could be denied. If your homeowners quote is too much & causes payment to increase you could be denied. Taxes could go up… Until your house is done you have no guarantees.

George asks…

1st time home buyer pre-approval question?

So who is a good lender to get pre-approved with for a 1st timer that has marginal credit and doesn’t want to pay anything down?

John answers:

You can do a 0 down loan if you have millitary background or are buying in a rural area through a rural development loan. Other than that you have to have a credit score better than 620. I would not recommend buying a home if you don’t have any money saved. If you cannot afford to save money now, how will you afford to pay for a mortgage, utilities, repairs, taxes, insurance, ect?

Mary asks…

FHA Home Loans what do i need to qualify ?

I want to purchase my first home, what do i need to qualify for an FHA home loan? Down payment, income, credit requirements, etc. i make $3,000.00 dollars a month is that more then enough to qualify for an FHA home loan.

John answers:

When applying for a home loan your credit report will be reviewed and you may be required to provide a number of other details, including: Employment and income records, Tax Returns for the last few years List of assets, List of liabilities and what you owe, Your budget showing monthly living expenses so that you can demonstrate an ability to pay.

Http://www.worldbestloans.com/homeloans.htm

With this information you and your lender will be able to determine the kind of home loan and size of the right mortgage for you. In some cases, you can obtain a pre-approval or pre-qualified certificate, which shows how much you can borrow so that you can then shop for homes in an appropriate price range.

Michael asks…

What Home loan should I take?

I am 62 and want to give my child 125k to put towards a house she is buying. I don’t have the money on hand, so I want to take it from the equity in my house. I have a mortgage of about 225k left at 6.5%. The house is worth about 800k to 1mil. I plan to put the House up for sale in the late summer of this year and move to a smaller house I own out of state. My daughter will make the payments on any loan I take out up in till I sell the house, then I will just pay off the loan with the proceeds of the sale of the house. Like any good Dad I said I would pay, but, she is insistent on paying till I sell the house. I would like to find out what is my BEST Option to have the smallest fees and the lowest payment for her so she is not hit so hard. PS She will be paying me and I will be the one who pays the bank. Thanks!
Is a HELOC an option?

John answers:

When applying for a home loan your credit report will be reviewed and you may be required to provide a number of other details, including: Employment and income records, Tax Returns for the last few years List of assets, List of liabilities and what you owe, Your budget showing monthly living expenses so that you can demonstrate an ability to pay.

Http://www.worldbestloans.com/homeloans.htm

With this information you and your lender will be able to determine the kind of home loan and size of the right mortgage for you. In some cases, you can obtain a pre-approval or pre-qualified certificate, which shows how much you can borrow so that you can then shop for homes in an appropriate price range.

Linda asks…

Confusion about applying for home loan…?

My husband and I are first time home buyers. We are trying to fill out a loan application through Sibcy Cline, but we are confused. The loan application asks us about the price of the home we are purchasing. We do not have a home picked out yet so we do not know what the price will be. Should we just put in what we believe the high-end of our spectrum will be? For example, we think we will not be able to purchase a house for more than $75,000. Should we just put $75,000 as the purchase price? Thanks.
Let me clarify. I think I screwed up what I was talking about. We are trying to get through the pre-approval process. Does that make things different? Thanks.
RT, I’m glad you know what I’m talking about. Obviously, I was having issues.

John answers:

Since the home itself will be collateral for the loan, you can’t really apply for a loan until you have a piece of property under contract. One of the things that will happen is the lender will send out an appraiser to set the value of the property. Typically, they will loan you up to 80% of that value.

What you can do is go through a pre-approval process. This is not a real approval (because of the reasons I just explained) however they will check your credit and income and give you a good idea of how much they would be willing to lend you. Then you can look at property in that price range.

EDIT: OK, if this is a pre-approval, then put down the amount you intend to finance. Remember that they will expect you to put down 15% to 20% of the purchase price. You can’t really screw up a pre-approval, it’s sort of like a dress rehearsal. Also, just because you get pre-approved for a particular amount doesn’t mean that’s the final loan amount. The amount loaned also depends on the property being purchased!

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