The Horticulturalist

We may be looking to buy a house in the next six months, so I have a few questions about the process and how long it's likely to take. We do not currently have a property to sell so this would be the first time buying in the USA.

So assuming the bank approves us for a mortgage, can that be approved and processed before you start looking at properties for sale or do they only fully complete the application once you find somewhere you want to buy?

Once we find the house we want what would be a realistic time frame to get everything sorted out and a moving in date fixed?

Anything peculiar to the US system that I might need to be aware of or is it much the same as it would be in Blighty?

Thanks

Sally Redux

You can get pre-approval from a lender which shows you are a serious buyer but they have to be happy about the value of a specific property for the mortgage to actually go ahead.

You will need about 30 days to get inspections done and so on - the period of time until closing is agreed when the sale is.

You usually have a realtor working for you as the buyer. Their commission comes from the seller's agent splitting with them.

IanH88

your post is vague about your current status in the US and without that information, the answer is hard to provide in detail, however, top line is that it's a totally different system and I'd advise that you do a LOT of reading before starting the process

getting a mortgage is extremely challenging and unless you have a significant deposit (30%) then you will struggle to find a lender

fatbrit

Nothing like.

You're right to start worrying about the loan first. Here's your first homework. Read thoroughly and understand before you start applying: http://mtgprofessor.com/

Bink

I'm sorry but I didn't find this to be true. Whilst a large deposit is nice it's not necessary. Depending on where in the country and what you are looking to buy an FHA approved loan may be an option which only requires more like 3.5% although there are maximums depending on the location.

I managed to get a mortgage here within 2 years of arriving although I did have proof of a UK mortgage which the U/W did take into consideration.

The OP's sig implies they got a green card in 2010 so I'm assuming they have a credit history by now.

The Horticulturalist

Current status is in my signature, we are permanent residents. The bank said they will loan us money so that's not really my question at the moment.

This will only happen if we move to another city (which has not been decided yet) and I'm trying to gauge ahead of time what a reasonable time frame would be so that we don't commit to arriving there before we can move in to the potential purchased home.

fatbrit

30 days from the offer is the norm.....as much as there's any norm in real estate.

The Horticulturalist

Thanks, that what I wanted to know.

Michael

If they are LPRs, they would likely be able to get a FHA loan for as little a 3.5% down and a lower credit score than conventional loans. The maximum FHA loan is based on income and the area of the home to be purchased. The following is a link of the requirements, costs, and limits for a FHA loan.

http://www.fha.com/fha_loan_requirements.cfm

Normally you can get pre-approved for a loan based on your income and current debt. If you have credit card debt, pay that off before applying since that type of debt can significantly reduce the amount that someone qualifies for. Although the pre-approved amount can be high, the home will need to be appraised at or below the value of the loan and if it isn't, the buyer will have to come up with a greater down payment.

Michael

In California, 60 days is much more common. There are appraisals, inspections, acquiring the mortgage (some people shop around for a better rate even though they are pre-approved with a specific lender), seller arranging for move out, and the closing.

The Horticulturalist

Thanks Michael, this is all helpful info and I will read it later.

We have no debt so that should go in our favour. Does pre-approved simply mean that they will agree to loan you up to a certain amount ahead of a purchase, provided they approve of the property you want to buy?

Michael

Yes, the lender approves an amount based on your income and debt, Then you go shopping for the home that you desire is equal to or less than that amount, have it inspected and appraised, and if everything is ok, then the lender will make the loan.

fatbrit

Sixty wouldn't be outside the bounds of possibility here in AZ, either. Having said that, I'm due to close on a house this Tuesday. I put the offer in on Xmas Eve, and the appraisal, inspection and loan are all done and dusted. Helped that it was empty, and I've worked with the loan broker before. So that'll be a 20-odd day closing with two major holidays in the middle.

fatbrit

I'm not sure no debt is good news. For ratios, maybe, especially if you're close. But no debt screams no credit score to me.

Michael

30 days is not unreasonable for an empty home but even then, many buyers request 60 days in California just to make sure they have the best interest rate, can give notice on their apartment, negotiate for critical repairs needed with the seller, and other possibilities.