First time home buyer - pre-approval, approval process?

Question

My partner and I are looking to buy a home. We have never owned property before. What do I do? Simply make an appointment at the bank to get pre-approved? And pre-approval.. does that give us kind of like a ballpark idea of how much we can afford? And then once we find a property, we get a purchase agreement? And take it to the bank? ahh confusing haha.

what kind of documents do i need to bring? any advice would help, first time buyer! thank you :)

Answer 1

This is easy. Just go to a mortgage company. A mortgage company represents many lenders and many types of loans. That's what they do, find a loan that best fits you. Shop around too because different mortgage companies represent different lenders.

You don't need any documentation at this stage, just a good idea of what your income and expenses are.

When shopping around don't allow them to pull your credit scores because every time someone pulls your scores they go down a notch.

Good hunting. Now is a great time to be a buyer.

Answer 2

.   There are 50 different lenders in every town.  THey all will give you a loan.  THe rate for 30 years will be apx 6.5% .   You choose one and fill out 15 minutes of paperwork.  Where do you work and where do you bank?  You will be approved in 14 days at the most.  You make an offer on a house.  The bank sends an appraiser to make sure the house is worth what you offered.  A few days later the bank has a stack of papers for you to sign.  THe next day the bank writes a check for $200,000 (your loan).   You own the house.  You are amazed at how easy it is.  

Answer 3

Contact a mortgage broker in your area (avoid the on-line services or heavy advertisers). They get rate sheets from lots of different lenders every day and can help you figure out what mortgage product would be the best for you. They can also pre-qualify you for a loan in just a few minutes. They'll need to know your verifiable income (through tax records or pay stubs), all assets (including bank accounts, 401k plans, stocks, etc.), and all debts (they can get that through your credit report).

They will then figure out how much you would qualify for, which is basically the top of your price range. They can then provide you with a certificate of pre-qualification that you submit with an offer package when you finally put an offer in.

When you do submit an offer, you then have to get loan funding, which is a bit more strict than pre-qualifying. For this, you may need 2 years of tax documents and other docs that weren't required for pre-qualifying. These requirements vary by lender.

If you have a mortgage broker, you would do all of the loan transactions (submitting paperwork, for example) through the broker.

Answer 4

Many good answers, but lets answer some of your specific questions with some clarification.

1)  You'll want to first do your research.  Ask friends or family that own homes where they went for a loan.  Research the lenders.

2)  There is a Pre-Approval and Pre-Qualification.

Pre-approval means that the lender has pulled your credit, run you through the underwriting system and has already "verified" your information.  Assuming the appraisal comes back okay, home inspection etc you loan will close.

Pre-qualification means that the lender has run some numbers based on what you told him.  Credit is not pulled and nothing is verified.  This is not usually worth the paper it's printed on.

3)  During this process, the lender will tell you how much you can afford.  This does not mean you have to spend everything they tell you.

4)  They should also give you a good faith estimate of all the costs of doing the loan in writing.

5)  Ask a lot of questions.  This is a big deal.

Once the property is found and purchase and sales agreement signed, you let your lender know, they will order an appraisal, you will go through home inspections etc and a closing date scheduled.

Shoot me a message if I can answer any more questions.