How dependable is a lock-n-shop prequalification(Countrywide Home Loan). I was prequalified for $150,000 with 5% down and a 7.75% interest rate. Can I trust that I will be approved when I apply for the loan?? The only difference between today and when I buy a home will be the cash available and possibly a minor increase in my credit scores.
Prequalification means jack. You need to be preapproved. With a prequalification all they do is take your income and subtract your debts to give a rough figure on how much home you can afford. A preapproval, on the other hand, is a lot more detailed - W2 forms, payroll stubs, credit reports, etc. I know of no bank that will honor a prequalification. Dani
I'll first admit to having limited knowledge of mortgages, but as I understand it Prequalification and Preapproval are different animals. The Prequalification will lock you into a rate, based on approval of your credit when the actual loan processes. If they will offer you a preapproval, the loan is already approved. With any mortgage, a credit report is usually pulled again just before closing, and it there are signifigant changes it can make or break a deal. I'm sure others will be able to clarify this with greater detail and accuracy.
Dani, Thanks for shedding some light on that subject. I must admit that I had not noticed the difference between the two.
All I can say is be careful...I just closed on a house at the beginning of this month through Countrywide, actually Fullspectrum which is a division of Countrywide, they seemed very helpful during the process, however, the lock-in price they promised wasn't what they promised or I agreed to in ALL the prelimary paperwork, it turned out to be about 50 basis points higher, my attorney suggested I walk away from the deal, but unfortunately I was taking cash out that I needed the funds for another investment I was making so I signed everything under protest and am in the process of trying to get what I was promised LEGALLY, so I don't know if this helps or not but in regards to your question, until you close....you really do not know. My attorney said it was pretty common practice in the lending industry for that to happen.
MY FICO at the time was 601, they rated me internally as a A-.....for people with poor scores they have whats called a credit comeback loan....where your interest rates drops (with ontime payments) over 4 years and then locks in for a 30 year fixed, I was told and signed prelimanary documents saying my rate would be 7.865, however you can imagine my surprise at closing when it was over 8 percent!! Like I said, my attorney said, these lenders do it all the time, so you have to be REALLY careful at closing, for those of us who don't have a lot of options sometimes you just have to make a deal with the devil....by paying just a couple of extra hundred dollars a month I'll pay off the loan in 22 vs. 30 years, and like I said I also signed under protest so hopefully I'll be able to do something about that rate, I'm considering sueing as well....let ya know as things progress....I have no installment loans so I am curious as what will happen to my score once they start reporting.
I found a lot of good information at www.americanloansearch.com They have lots of great info if you are in this process and have damaged credit.... good luck!!
I hope to be buying a home this summer. This is where I expect to be: 3 prime cards 2 store cards car loan (will be refinanced by then to an APR you can say in one breath, LOL) Wish me the best!
i am having a similiar issue with Countywide. The loan broker has told me that we are pre-qualified and has given me good faith estimates. He keep stalling with the actual pre-approved and it starting to piss me off. This is the first house that I have tried to buy, so I don't really know what to expect. The house won't be done until May, but should I get a pre-approval in writing before we start the escrow process?
Rytham, Get preapproval. I got preapproval from my lender five months before my house was completed. If you wait until the last minute closing is going to be hectic (or quite possibly may not happen). Do you have a contract on the home? If so, tell the lender to preapprove you now or you will find another lender. Prequalification doesn't mean squat in the real estate world. Usually the average home loan takes 60 days from preapproval to settlement. The lender may not want to begin the process four months ahead because he may be concerned about the housing market fluctuating. Being preapproved for a loan just means you're serious about buying and sometimes can be the difference between buying the home you want or losing it to someone else. Dani
