Prequalifying - Best place to start?

DH and I are going to start looking for a house. I want us to get pre-qualified but don't know where to start.

Do I use a mortgage broker? Check out rates myself?

Any advice would be appreciated!

TIA!

Re: Prequalifying - Best place to start?

I wouldn't use a broker in this market, that's for sure! DH and I reached out to a loan officer at Wells Fargo who has been AMAZING, we are actually closing tomorrow. DH and I are both lawyers, so you can imagine what a PITA we are! FM me if you want his contact info!

Re: Prequalifying - Best place to start?

You're going to want to get preapproved (as opposed to prequalified) asap. It's a more thorough check on credit, income, etc. You will need a preapproval to make an offer, and it is also to your advantage to get a really good idea of what you can afford before you start looking (some people way overestimate, but others really underestimate it).

You can contact a variety of lenders (banks, credit unions, etc.) to find one you feel comfortable with or you can contact a mortgage broker. Personally, I am not anti-mortgage broker because while every bank is different in terms of what they offer, what they will accept, etc., a mortgage broker has access to all different banks and can put your loan through the one that works best for your situation. So sometimes that is a good thing (and the bank pays the broker, not the buyer). But I also work with great direct lenders. If you want recommendations (on direct lenders or brokers), let me know.

I wouldn't try to figure out rates yourself, because they are constantly changing. I'd shop around a bit and see what different lenders can offer you. Also, there are different loan products, depending on your credit, down payment, etc., so talking with a lender can help you become educated about what is best for you. You aren't locked in to any lender that you consult with or get a preapproval from, so it doesn't hurt to contact a few.

Re: Prequalifying - Best place to start?

Christine, your posts are extremely helpful! :)

If you go to different lenders to get pre-approved and they are running your credit (hard inquiries), does that hurt your credit? I know usually hard inquiries can make it drop a little, so if you go to all these lenders to see what they offer, does it harm your credit at all?

Re: Prequalifying - Best place to start?

Jax:

I don't think it "hurts" your credit, but in our case, we did have to write a letter explaining what each inquiry was for and promising that there was no credit extended as a result of that inquiry. IMO, wirting the letter was worth shopping around and making sure we got the best rates, the lowest fees, the most reasonable escrow deposit, etc.

Re: Prequalifying - Best place to start?

Thanks, Lori. That makes sense.

Re: Prequalifying - Best place to start?

you have 30 days to mortgage shop with out it having an effect on your credit- no need to write any letters this is common practice

however- I would have 1 person run your credit- and then bring the report with you if you are going to shop

I personally like direct lenders vs banks in this market

if you are going for an FHA loan Continental home loans banks more FHA loans then all the other banks in the northeast combined

they have in house underwriting - which makes a huge difference

if there is an issue- the loan officer can go upstairs and speak with the underwriter

if there is an issue and you are using bank of america (who I would never recommend) the underwriter is in another state