Approved for Mortgage?
When you get approved for a mortgage do you need to have your down payment ready? Or do you just need to get approved?
I plan on getting approved, do I need that down payment at that time?
- W. ELv 51 decade agoFavorite Answer
Ok, you are going to have alot of answers to this one, so here is one more. Depends on the Lender (ok). Some have a seasoning issue, so the money would have to be in your checking account 30- 90 days. Unless it is from a IRA or possibly Income tax. Ask YOUR bank or mortgage broker. He/she can advise you. Can I ask you if you want to put money down, to go with a 100 percent loan, or even FHA, etc. That way you have money for updates for your new home and new furnature, etc. Just curious. Your broker you are working with should be in contact with you daily and be there for YOU and help you will the whole process. The lender will verify your funds to close, prior to the closing. If that answers your question. They will not draw you the closing docs' and give a clear to close until than. They need to know that the money is there.
When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok - Just depends on your credit. You could get a lower interest rate or it could be higher - it is all based on credit. It is up the Lender what they offer you.
It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realtor, and the seller has to pay the realtor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far?? You may find a For Sale By Owner, they are sometimes more willing to help you with closing cost(s) associated with your loan, since there is no realtor fees.
Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) FHA/VA approved too. If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home &/or refinancing, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.
By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.
Cost associated with your loan. You will need to pay for the appraisal up front (when it being done). You will need to pay for The Home Owners Insurance Coverage for 1 YEAR . The seller can help you with up to 6 percent of closing cost. So the title fee, lender fees, underwriting fees, broker fee, processing fee, flood cert, etc can be paid for by the seller.
Good Luck - the Loan Process can be fun - at least I love being a Broker, getting to help my clients is rewarding to me. Find a Broker who cares and will go over the full loan process with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process.Source(s): Branch Manager / Mortgage Broker for 7 years and love helping my clients. Underwrite in the US FHA, VA, Residential Commercial, Investment, Conforming, Sub-prime USDA Rural Housing Direct & USDA Guaranteed Loan Lender
- 1 decade ago
You need to have your downpayment when you come to the closing table.
I strongly recommend that you have no debt, a strong emergency fund (at least $10,000), and a down payment that is at least 20% of the total mortgage to avoid paying PMI (private mortgage insurance) *before* buying a house or getting a mortgage.
Also, the mortgage payment should not be more than 25% of your take-home (net) pay on a *15*-year *fixed* mortgage. Do not get an adjustable rate mortgage (ARM), as rates are near the lowest in history and they will only keep climbing up. Do not get a mortgage with a balloon.
If you want more good advice, go to http://www.daveramsey.com and look at what is on the website. I strongly encourage you to go through "Financial Peace University" (Dave Ramsey's course) before buying a house. No financial products will be sold to you, it is only a course for you to understand how money works and to use it wisely. Good luck.Source(s): I do financial counseling.
- 1 decade ago
The lender you decide to go with will need to verify funds for the down payment. On a conventional loan, that money will either need to already be in an account of some sort or you will need to be able to document the source of the down payment before closing (such as proceeds from the sale of a current residence). You will not have to necessarily have the funds available when you apply. Hope this helps.
- 1 decade ago
Some loan officers will look at your credit score and say you're approved. Their not telling you what kind of loan your approved for. A good loan office / broker will tell you if you qualify for 100% financing, 80% financing, etc. If your loan does require a down payment to qualify for the loan the lender underwriters will want verification of deposit. The money should be on deposit at least 30 days. There are exceptions such as gift, verified by letter.Source(s): 15 years of owning rental properties and doing several mortgage loans, 7 years of being mortgage loan officer.
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- batwandaLv 41 decade ago
and generally you will need the downpayment to have been in the bank for at least 30 days, unless it is coming from an ira or some type of account like that. but if it is a gift from a family member, tell the mortgage broker up front where it is coming from so they can pick the right program for you
mortgage broker (me)
- 1 decade ago
You need the down payment when you close on the house or if refinancing when you sign the paperwork for the new mortgage.
- MichelleLv 44 years ago
Buying a house and getting a mortgage is not for the impatient. It takes as long as it takes.