Buying A Home
LabLove86
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
First Home Club and pre-approval
Hi all - so I am doing a savings program for first time home owners called First Home Club - not sure if this is a nation-wide program or something that is only available in my area.
Anyway - the idea behind the program is you put $$ away each month for a pre-determined amount of time of your choosing (anywhere from 10-24 months). And once you've deposited the amount for the last month then you get a grant that can go towards down-payment, closing costs, inspections, lawyer fees - anything that has to do with the house itself. In order to qualify for this there are income caps, deposit guidelines ect.
So - being part of this program doesn't automatically mean you'll be preapproved for a mortgage. And because of this I'm kinda nervous about GETTING pre-approved.
So I guess I have a few questions for you guys -
I will be going in Aug for the pre-approval . . . . how long does it take? Days? Weeks? Do they do it while you're sitting right there??
As far as getting pre-approved - I'm a little nervous but I think that is normal for anyone thinking about this kind of thing. Anyway - I don't make a ton of money - $35-40/yr - but I live in the suburbs of the Buffalo are so our cost of living is fairly low as compared to the rest of the country. And my credit score is pretty good - 770 - and my debt is school loans, a car loan, and some credit card debt but nothing insane.
Anyway - what are your guys experiences with pre-approval and that whole aspect of home-buying experience?
Thanks for the input in advance!
Re: First Home Club and pre-approval
Hi! My FI and I did the First Home Buyers club as well. We started saving in April for 8 months and we're eligible now to receive our grant money. The mortgage will be soley in his name and he is in the same earning bracket as you and same credit score and same kinds of debt (few hundred on a credit card, student loans and a car loan). He went through the preapproval process back in December I believe (we found a house pretty quickly and have gotten approved for our loan, just waiting to get the grant money so we can close) and he got the preapproval pretty quickly - within a couple days I believe, or sooner (I'm not completely sure, he works at the bank that we're getting the mortgage through). He was preapproved for $120,000 and we just got our mortgage commitment letter last week. It has all gone pretty smoothly so far so hopefully nothing derails us from here and we can close in the beginning of March! Good luck! The program is great and you can start looking a couple of months before you're set to get the grant, since closing can take 60 days (or longer!)
ETA - we're in the Rochester/Finger Lakes area so we're in the same cost of living situation, if that helps with a reference point as well.
Both times that I've bought houses I've been nervous about the pre-approval and both times they pre-approved me for more than I thought I'd qualify for. Doesn't mean that's always the situation but that's how it happened with me.
I went in to talk to the banks and was able to get a pre-qual pretty on the spot. On the lender I decided to move forward with I gave them all the extra paperwork they were asking for (it helps if you already have all your W2s, pay stubs, etc. ready to go) and got my approval back with 24 hours. Partly it will depend on who your lender is. My experience has been that big banks take a little longer to process the paperwork than credit unions but it still shouldn't take more than a couple days to get the pre-approval.
Good luck with purchasing a home
I was house shopping during two different periods of times and got a pre-approval from three different banks and one mortgage broker throughout the process. All four of the pre-approvals I got over the phone without even meeting anyone in person first (they were all local). Some of them gave it to me literally while I was talking to them and some of them called me back later that day. I needed to provide them with my name, address, phone number, social security number including permission to run my credit, income, rent currently paying, and bills...but only bills with a fixed monthly payment amount, ie credit cards, car loans. No paperwork needed yet. The myriad of paperwork to turn in came with underwriting which is WAY later in the process. As in you already found your house, are under contract, and had your inspection...later in the process.
It could very well be different with different banks/regions, but I have never heard of a preapproval taking very long at all.
I don't know anything about First Home Club
. Wish I had, sounds awesome!
I also live in a LCOL area and, at the time I bought my house earned in the mid $40s with (unfortunately) a WAY worse credit score than yours, lol. Try mid 600s. I still didn't have many problems and was pre-approved by all the banks I spoke to. I did have a decent down payment (10-20% depending on the price point). And yes, my entire home buying process was after the crash and after banks tightened up their lending requirements.
HUGE PIECE OF ADVICE!!! Not yelling
, just can't stress it enough to help you out. Keep those monthly debt amounts (credit cards, loans) as low as possible. I was stunned at what an enormous amount just a little difference made. For example, my first go round, my car loan payment was $260. I was pre-approved for $130K. My second go round, (unfortunately first car was totaled in an accident, but insurance paid it off) my car at that time had a $160/payment. This time, I was pre-approved for $160K. I was approved for $30K more because my debt had been reduced by $100/month! Very little else had changed.
I even questioned my loan officer because that seemed like such a crazy difference for such a small debt change, but he wasn't surprised at all and said it sounded about right. He also said he is usually in the position of having to give people that news in the opposite direction.
One item to note - you aren't always obligated to get your loan through the same bank that you set up the First Home Club account with. The one way around it (that we know of and that was suggested to us by our realtor, whose father is the head of a local bank in our area) is if the bank you're getting your mortgage through doesn't offer the type of mortgage you want. For instance, you want an FHA loan but your bank doesn't offer FHA loans. You should (key word - should) be able to take your First Home Club grant to another bank that does offer an FHA loan because there's no way you could get the loan through your current bank. Just some food for thought
But really, after everything you've said, you should have no problem qualifying for a loan. FI has all the same debt (little credit card debt, awesome credit score, car loan, student loans, monthly bills and rent) and makes the same amount as you and he was approved for $120,000.
ETA to clarity.