When to get preapproved?

posted 3 years ago in Home
Post # 3
Member
2642 posts
Sugar bee
  • Wedding: September 2012

I’d get preapproved right when you want to start looking.  It only takes a few days.  It’s good to know the size of the loan you can take out, the interest rate you’ll most likely get, potential closing costs, home insurance, etc. so you can make a budget and narrow down your price range.  However, these preapprovals are only good for about 60 or 90 days (depends on your bank/CU I believe) and you’ll need the preapproval for your offer.  So don’t get one until you are ready to start looking. 

Once you find a house you like and get your offer accepted, THEN you can apply for an actual mortgage.

FYI, I’ve heard that December is a good time to shop for homes.  There’s not a lot of competition and it seems that people are more willing to work with you (in good spirits because of the holidays or they really need to unload the property).  So it might be worth it to start looking in December.

Post # 4
Member
3516 posts
Sugar bee
  • Wedding: April 2013

@irishphoenix:  We got pre-approved then starting looking right away. I’m pretty sure the pre-approval is only good for a certain length of time, it doesn’t last forever. So if you do it too far in advance, you may have to get re-approved if the other one expires. I’d double check with the bank though, maybe that was just the bank we used policy.

Post # 6
Member
3570 posts
Sugar bee
  • Wedding: September 2011

I would start hunting a little earlier if you lease ends in February.  We made an offer on a house in the last week of May, and will be closing on August 31st.  

Post # 7
Member
10495 posts
Sugar Beekeeper
  • Wedding: January 2011

@MrsTVLover:  +1

Some sellers want 30, 60, even 90 days notice before you get possession after having an offer accepted.

Post # 8
Member
7654 posts
Bumble Beekeeper
  • Wedding: July 2012

@MrsTVLover:  +1

I would get preapproved end of summer/beginning of fall if your lease ends in February. Sometimes the abnk and realtors can take longer than a month or two to close the deal. For us it only took a month, but we did a private sale and the longest part of that was the bank being slow.

On average in my area, it takes anywhere from 3-6 months to close.

Post # 9
Member
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

If your lease is done in February, I’d start looking in early November at the latest. You can always write into an offer a delayed closing, but you cannot speed up a bank’s typical 4-5 week long closing process. So it’s better to give yourself more time rather than less.

And wait to get pre-approved until you are actually ready to shop. Pre-approval means that the lender will do a hard pull on your credit. Each hard pull knocks a few points off of your credit score. So you don’t wanrt them to do the pull too early, only to have to do it again when you actually need it because that will needlessly hurt your credit score.

In the mean time, review each of your credit reports, dispute any negative information and correct anything that is inaccurate, save every penny, don’t go financing/charging any big purchases, don’t open new lines of credit, and make sure that your down payment money is chilling in your account so that it will be seasoned.

Good luck! 

Post # 10
Member
1106 posts
Bumble bee
  • Wedding: July 2012

Im not sure how the market is where you are, but here in Michigan it took us 6 months of active looking before we found “the house”. We offered and were lucky to have a quick closing, & got into the house within 4 weeks of our offer being accepted.

I agree with PP to start looking earlier than December if you need to be out of your current place come February.

While it is good to look during the winter months, you’ll also notice that fewer houses get listed in the winter because more people are less thrilled about filling a moving truck in the snowy cold (at least thats how it is here)

less options for houses may extrend your search time–

happy hunting! its a lot of fun (and stress) but you’ll know when you walk into the right house!

Post # 11
Member
2642 posts
Sugar bee
  • Wedding: September 2012

@MrsTVLover:  +1

It usually takes at least a month to close (the lender usually needs several weeks to process your mortgage paperwork).  You can get it done sooner, we did ours in 2 weeks, but you won’t have the freedom to really shop around.

Plus, depending on your budget and your desires in a house, it could take a while to find something you like.  You don’t want to have to settle for a house you aren’t in love with because you are on a time crunch.  We looked for about 2 months before we found something but we have friends that searched for 6 months.

Post # 12
Member
13019 posts
Honey Beekeeper
  • Wedding: June 2011

If you want to move by Feb, I’d actually start looking sooner than Dec, maybe as early as Sept.  You can get preapproved once you meeting with a realtor and start to seriously look.  If you have your finances straight and know your own budget based, I think preapproval is really just a formality that the realtor wants to make sure they aren’t looking above that.  Most people I talk to have a a comfort level much lower than what you can really borrow, so a preapproval really doenst buy you anything imo. 

Post # 13
Member
187 posts
Blushing bee
  • Wedding: April 2013

@irishphoenix:  Preapprovals are only good for a certain length of time; however, it is never too early to sit down with a lender and/or realtor and begin to build your relationship.  You will be working very closely with these people throughout the homebuying process and you will need to feel comfortable with them.  A realtor can give you an idea of what your local market is doing & let you know when you should start looking if your goal is to move into a new home by February.  A lender will be able to look at your current financial situation and give you suggestions on areas that may need improvements.  Even if they don’t give you an official preapproval just yet, they will be able to give you a good idea of how much house you’ll be able to afford.

Post # 14
Member
52 posts
Worker bee
  • Wedding: June 2012

Once you get your paperwork together, preferably early-mid Fall, go and get a pre-approval so you know what you can afford. If by the time you find a house you want to make an offer on, your pre-approval expires, it takes no time to get a new pre-approval from the same lender if needed. We got a pre-approval in February, found “the” house in early April and got a revised pre-approval. Contract was signed within a couple of weeks, and we just closed this week. So it definetely takes time, approxmiately 3 months, for the whole process after finding the house you want to buy. Good luck!

Post # 15
Member
10384 posts
Sugar Beekeeper
  • Wedding: September 2010

November and December can be a really hard time to try and buy a home (the holidays and all) so be prepared that trying to look in that time frame may really throw things off, and depending on the bank, your pre-approval may need to be extended while you look. Since you want to be in the home Jan/Feb, you’d have to have an offer successfully accepted at the time of year when there is the lowest inventory and that is really tough. Some banks don’t re-pull your credit score to renew the pre-approval, some do. I would specifically work with ones that don’t so that you don’t get a double hit on your credit score from the hard pulls.

I’d also look at the market – what is the average days on market in the neighborhoods you are interested in? If it’s 45 days or less, that means that homes are basically snapped up within 2 weeks (and the remaining time is the home under contract waiting to close). That’s an aggressive market, and it could mean a lot more bidding, losing out, and then waiting. Where we bought, the average days on market was about 23 days, which was the all cash buyers pushing even faster closing dates on average. It’s insane. It’s taking most people 6 months to a year to successfully bid.

 

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