Pre-Approval Woes

[Damian Baynes]

Hello all,

I'm a new member and I'm very glad I stumbled upon this forum. I have a question regarding pre-approval for a mortgage. I'm looking to buy a 2-3 fam home with a partner of mine and we are looking to get a pre-approval on a mortgage. The problem seems to be that we cannot get someone (banks) to just schedule an appointment with and us meet at their office to knock this thing out. I'm honestly not worried about us getting approved for a mortgage b/c we both have pretty good incomes, great credit and a reasonable down payment, but we feel it would be smart for us to get an actual pre-approval to know how much we would be able to afford. I had one person from a bank schedule an appointment with us and then at the last min he left a voicemail saying he wouldn't be able to make it but to call him back when I'm free so we can do it over the phone. Do what over the phone? Have any of you been having a similar problem?

[Jon Holdman]

I've never done this by sitting down with someone at a bank. Usually someone gives me a long list of what they need and an application (a 1003 form). I fill out the form and gather up all the relevant info and send it to them. Actually getting the pre-approval after they have all the info sometimes takes some time.

As far as what you can afford, ask them for their "ratios". Front end ratio is the PITI for the new loan divided by you gross monthly income. Back end ratio is the new PITI plus all your other debt payments divided by your gross monthly income. You may be able to leave out payments for loans that will be paid off in six months or less. Used to be 28% and 38% were common ratios, but these vary more now. Sounds like this is your first rental property, so rental income will not be included unless you've found a very flexible lender. Just do the math and you can get a pretty close estimate of what you can afford.