Our awesome tax dude finished our taxes and sent over the forms earlier this week, so we set an appointment at our favorite bank of all time to get a ‘good faith estimate’. A good faith estimate is basically like a dress rehearsal of the meeting where you get a preapproval letter for a loan. You discuss income, credit scores, debts, etc and the loan officer gives you a dollar amount that, based on what you have told her, is a realistic amount you could get a loan for.

In this meeting she doesn’t actually verify any of the information you give her – no credit check is performed. And no loan or rates are locked in. But now we have a number, which is wonderfully exactly in line with what we hoped. So we can start perusing listings in that price range with more confidence. We learned a lot of valuable information at our meeting…  she was so nice and patient with us (90 minutes!) that I felt guilty that we won’t be able to consider Commerce for our loan. They don’t have any branches in Oregon.

I really prefer smallish, region-based banks over the big national ones. But ultimately the mortgage will come down to the numbers and best rate we can get. I’m more concerned about having a friendly small bank for day-to-day checking stuff, the mortgage we hopefully won’t have to deal with very often aside from sending a monthly check. Besides, mortgages get bought and sold all the time so even if you do your financing with a small bank there’s a good chance they’re not the one you’ll be dealing with and sending checks to anyway.

We were pleasantly suprised to find that it doesn’t appear that both of us being self-employed will hurt us on getting a loan *knock on wood*. You just have to have meticulous income records and two years of tax statements. While most people walk out with their pre-approval letter same day of that meeting, ours will take 7-10 days because of the research the bank will have to do to check our income history. But we should get it based on this good faith estimate.

I’m going to start researching banks in Oregon (any suggestions)? With plans to visit a few shortly after we arrive in June and get some good faith estimates. It will be as much as us interviewing them as them interviewing us. I want a loan officer as awesome as the lady at Commerce we met with today.  Since Peter and I are fortunate enough to have good credit scores, no debt, and are going to pay enough down on the house to not need PMI on our loan, it seems like we will get the best interest rate possible at any given bank on our own. So I’m not sure if we need a broker, really. Is there an advantage to having one we don’t know about?

Once we find a bank in Portland we like we’ll apply for the Preapproval Letter from them, which locks in a rate and amount that is guaranteed typically for four months. This will help a seller to have confidence that we have a bank backing us up when we make an offer. However even then we won’t have to end up using the lender we got the letter from. Different loans have different stipulations, depends on the property and so many things.  It all comes down to numbers.

I guess if all else fails though…

P.S. It’s worth pausing on the fine print screen to read the most ridiculous interest rate ever.