Hello BP Family! First off, thanks for all the information and assistance you provide for people like me who have more questions than answers. I've found the property in which I want to invest. I've been pre-approved for the asking price of the property ($24,900), and the mortgage banker at Quicken Loans has generated the documents based on that price. However, I do not plan on purchasing it for that price.
Should I be signing these loan documents for a number that may change, or should I negotiate a price that gets accepted by the seller and then sign the documents? Thanks in advance!
First mistake, IMO was going to Quicken, my understanding is they pre-approve anyone breathing. After sucking you in, the charge you the application fee and appraisal. After that, things can change as your pre-approval doesn't mean anything. Your telephone loan officer gets paid to pump applications in, the one I spoke to on behalf of another just flat out lied and charged the applicant. This was prior to the new laws, but they weren't following the laws then either.
Your sale price is below the minimum loan amount taken in the secondary market. I suggest you talk to a local bank. :)
Thanks for the information. Just to give you a little more insight, the property is a duplex and I'm using a VA Loan to finance the property. At this point, the banker is trying to gather information for the underwriting process (what he told me, anyway). He told me about the minimum, but since I'm using a VA Loan and I plan on living in one part of the property, I was told I could secure a loan.
Get away from Quicken. Find a local lender, and you absolutely don't make a formal loan application until After you have an executed contract, and preferably have done your inspections. The executed contract Should be required as part of the loan application, unless of course they're just trying to generate application fees.
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