Which comes first? Getting the offer accepted by the seller or getting the pre-qual from the HML? The reason I ask this is because one lender I read said that you didn’t have to wait, go ahead and get pre-qualed now. But wouldn’t they want to know specific #s before approving you? So they know if it’s an ok risk or not?
Someone let me know, cause I feel like I’m wasting time and I don’t wanna do that if I don’t have to or if I’m mistaken.
The lender takes info about your income and your credit and debts. They calculate how much you can afford and then you find a property at that amount or lower.
your income and your credit and debts
I have no income (stay at home mom/wife), my credit is probably not so great. I filed a chapter 13 in 99, completed it in '03 (due to a divorce…I got screwed!) Current debts are only ones I have with current hubby, who makes about 60,000 annually.
Whatcha think? :-\
your going to have to use his name to get the prequal unless you do a no income no asset no employement loan.
Howdy Deedeelynn:
Hard money Lenders ( HML) will give you a pre qualification letter without having the specific property named. It is a general letter stating your name and perhaps a loan ceiling of say $200,000. It will mention that the loan is subject to an appraisal and perhaps other details.
Most offers to banks etc need pre-qualification letters attached to even be considered so there it would be hard and slow to get a letter before the property is known.
LOL
You definitely do not need a property before you can get pre-approved for a loan. The idea behind a pre-approval is so the seller of a prospective property knows you can get a loan before committing to sell you the property.
The actual loan approval process needs to get all your financial information, the appraisal (at a cost to you), and various inspections done. These take time. A seller doesn’t want to tie up the property while this process goes on if they don’t think you can qualify.
The pre-approval process is done by a loan officer who knows the underwriting criteria. The underwriting process is basically a confirmation that all the information you gave the loan officer verbally is correct. If you have a good loan officer and you are truthful during the interview, the loan should get approved. The loan officer will pull your credit report at the time of pre-approval because most people have no idea what their credit scores are. The rest of the info you should already know. Then the only thing that can mess up the deal is if the property doesn’t appraise or has problems.
Its a chicken/egg thing. If you dont have the pre-approval, most sellers don’t want to sell you a home. But you couldnt get the pre-approval if you needed a accepted contract first.
Your BK is old enough that it wont be a problem, but as others have said, the main criteria in getting a loan is how will you pay it back? If you have no job, you have no way of paying it back.
the main criteria in getting a loan is how will you pay it back? If you have no job, you have no way of paying it back.
This will BE my job. We all have to start somewhere. If I had a “regular” 9-5 job, I wouldn’t be able to do this.
The exit strategy would be to pay the loan back with the proceeds from flipping the property. Isn’t this what most people do?
your going to have to use his name to get the prequal unless you do a no income no asset no employement loan.
I was really trying to avoid using his name and/or credit. How else am I going to build up MY credit? Any tips? It’s really my mother-in-law and I that want to do this. He’s ok with it, but I wanted to avoid using him as much as possible.
he will basically co-sign for you (technically he will be first on the loan because he makes the $ – but it doesn’t matter), the loan will be on his credit AND yours, this is by far the easiest and least expensive way to do it.
not only is this the easiest way to do your deal, but this principal of using a co-signer is generally the quickest and easiest way to establish your credit… get a couple more trade lines with him as a co-signer and THEN it would be easier for you to apply for credit on your own (except the no job is going to keep setting up road blocks, but there are ways around them–much easier than no job + no credit).
i can tell you would feel better if you did this totally on your own but…
why make it harder than it needs to be?
Thanks for all the advice. 
I will run this by him tomorrow.
In order for a loan officer to make a rough determination of your qualification requirements, the following questions must be answered:
Is the property in question going to be your primary residence? Do you currently own any other properties? What is the exact date of your discharge? Do you have re-established credit since said discharge? Any late pays since your BK? What is your credit score? Can YOU prove rental history in the form of cancelled checks in your name or via an institutional VOR? What LTV are you seeking?
These basic questions must be answered in order for anyone to make a basic assessment of your current situation. For example, traditional “no doc” loans require, at minimum, a 620 credit score with no lates within the last 12 months with a verifiable rent history…
Just a few comments from a 12 year veteran of the mortgage industry…
Thanks for all the help, everyone. This is great!
he will basically co-sign for you (technically he will be first on the loan because he makes the $ -- but it doesn't matter), the loan will be on his credit AND yours, this is by far the easiest and least expensive way to do it.
Here’s my dilemma. Maybe someone can tell me how I work this one out. My mother-in-law wanted to do this together. Her credit good, I suppose. They own two homes, renting out one of them. When I apply for a loan, whose name gets put first? Will they allow 3 people to be on there? I want my name in there somewhere so my credit get some much needed help. I am on, I believe, 3 credit cards with him…all Green! 2 of those are empty (no balance owing.) I have no idea what my credit score is…gonna find out though.