For the hell of it, I went out to www.indymac.com and went through their mortgage loan process online. They pulled my credit and afterabout 3 minutes, it came back and said I was approved. It then asked me if I wanted my Pre-Approval Letter so I followed the link. The letter that I can print out starts with: Date: 3/21/02 my name my address Re: Loan # XXXXXXXXXX Dear my name, Congratulations! We are pleased to inform you that we have approved your real estate loan application. Following are the terms of the loan we have approved: It then goes on to list the terms. Is this the "Pre-Approval" letter I need in hand to go house-hunting? I'm not quite ready yet (about 6 months away). I just wanted to see where I stood since almost all of my inquiries are gone. It says the preapproval expires 4/20/02 - does this mean I was actually really approved?
What kind of terms did they disclose to you? It SOUNDS bona fide, however I am the last person you want to get mortgage advice from, I have no clue about anything mortgage related.
I'm not sure who they pulled but the Rate was 8.75% and a 9.9% APR. On the application, I plugged in the numbers that would be used if I bought my current home at a possible selling price of $50K with a downpayment of $5K. I'm currently renting and the owner owes about $50K (about what the home is worth). For this exercise, I assumed worst-case scenario. I'd buy the house I'm in. However, my income and financial state would allow me to move outside the city and afford 2 or 3 times that amount.
It means simply what it states. You are pre-approved for a loan; however, I am sure somewhere in fine print it states that you simply met there initial requirements and that they have the right to decline upon further review of your credit. Yes, that is a letter that you could take with you as you go house hunting. It would make you look better to a seller over a buyer who did not have a preapproval letter. Although, recently, they have now added a higher level of letters that lenders can give to buyers. The highest level will state that you are approved financially and all they are waiting for is a property and an appraisal of that property. Mike G.
The key word is "PRE" approval, that letter indicates, that you prequalified, based on the loan amount and the debts you listed. They qualified you to look for a home within a price range. These letters do give you a bit of the upper hand, since the sellers know you are able to afford a certain price. However the actual approval process can not begin until you find a property and then they run it through the underwriter, either autmated or manually, after that is when you get the official approval.
Mom.... They actually pulled my credit and said the loan was approved. They did say at the bottom that I had to provide documentation of my income, etc. I know prequalified means they just take your income and say, "yeah - this is what you could afford". This actually generated and inquiry on my reports. They even assigned a loan number to me.
Ok, sorry they did do the pre approval. But also remember it is not officially approved until you find a house and they run it through. But it appears as long as you can document your income, you would be good to go with house hunting Also did they just run one report?? I know when I went through this, they initially preapproved our loan with just an Equifax report being pulled. When we found the house and they officially ran it through FHA, they pulled the trimerged reports.
When I completed the app, I asked for $45K, said I had $5K to put down. Selling price of $50K. My scores: EX - 625 EQ - 561 (FICO) TU - 646 Eloan - 588
Hi, Momof3, I heard that you bought a home recently. Congrats, I'm trying to get there myself. Do you know anything about FHA and their specific requirements? EX- 587 EQ- 565 TU- 525
They don't go by scores, but they do want payment history to be clear for the past two years. Plus you cannot have any unpaid items. They would have to be paid. On income, you cannot have more than 41% debt to income ratio (I.E. you make $1000 a month before taxes, then your monthly debt (Including mortgage but not insurance, etc.) cannot exceed $410). I just got approved today - I went with the basics 3% down. My scores when I applied was EXP 631, EQF 640 and TU 664. Hope this helps...
Thanks. But another question. Let's say that my payment history on my current monthly obligations is 100% perfect, but I have some unsettled chargeoffs, do they look unfavorably at that. Or does the 24 month payment period start then? I have two car loans; one that is perfect for 48 months, one has a 30 day late in 12/2000 that I am disputing with the bureaus. Three credit cards in perfect payment history and student loans all paid on time. When I pay off the bad stuff, where do I stand as far as FHA or VA? EQ- 565 EX- 587 TU- 525
