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Banks don't offer "pre-approval" anymore? Only "pre-qualification"? Why is this?

We are looking for a home, and I am under the impression that a real estate agent wants the buyer to have a letter of pre approval, but a lender I spoke with said that these are not available anymore? by gretchen475 from Krakow, Wisconsin. Nov 18th 2015 Reply


Yvette Jenkins (Yvette)
#39 ranked lender in Wisconsin - 21 contributions

We will do a pre-approval at Johnson Bank. You can apply at johnsonbankmortgage.com/yjenkins.NMLS ID 455918Yvette Jenkins920-225-5534

Nov 18th 2015
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Timothy Frid (tfrid@progressivels.com)
#75 ranked lender in Minnesota - 3 contributions

Hi Gretchen, My name is Tim Frid. I am a loan consultant working exclusively for my customers. I would be happy to get you pre approved for your home purchase. I am licensed in Wisconsin and Minnesota. My toll free number is 866-680-2840 and my direct dial is 651-202-0558. My email is tfrid@progressivels.com. Thank you for your question.

Nov 18th 2015
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Derick Condron (rightstartoregon)
#33 ranked lender in Oregon - 597 contributions

The lender you spoke with is probably worried about the new loan estimate and loan closing disclosure and trigger items that come along with this.

Nov 18th 2015
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Ritchie Baumann (Ritchie)
#28 ranked lender in Wisconsin - 28 contributions

Hi Gretchen, By all our answers you now know it's the policy of the bank you talked too and not true for everyone. One reason may be what Derick stated below. Another reason may be how that particular bank defines what is involved in a pre-approval and doesn't want to do the steps involved for a pre-approval. I'm a WI lender and have helped others in your area with financing. If you would like to talk about your loan options and pre-approval, call 262-754-3331 or email at Ritchie@trustprovidence.com

Nov 18th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,788 contributions

Yes and no... First understand that there is a difference between a pre approval and a pre qualification.. The Pre qualification is when a loan officer reviews all your supporting documentation (tax returns, bank statements, w2's etc..) as well as running your credit, and based on his experience, he feels he can get you financed.. Typically, if a loan officer says he can get you approved after reviewing your file, then 95% of the time it goes through.. a pre approval is when your loan officer takes all the supporting documentation along with the credit report and application and submits it to an underwriter.. they underwrite the file with the house to later be determined.. This is called a TBD submission. Very few lenders do this type of pre approvals any more for 2 reasons.. First, the lender is using its resources to underwrite a file that they might or might not get... Lenders typically charge $600 to $1200 for underwriting.. this is a real hard cost and if they underwrite a file and it does not develop into an actual loan, then the lender looses out.. The other reason is because even if a borrower is underwritten today, then if they don't have a home under contract within 30 to 45 days, it's very likely the file will need to be underwritten again.. and even if you go under contract right away.. the property will need to be underwritten which can take as much time as if your file were being submitted for the first time.. and whether or not your pre approved, the lender can deny the loan at any stage of the process up to the day of funding and recording.. this doesn't happen often, but it happens enough that you should be aware it can.. My advise.. if your scenario doesn't involve any strange or unique circumstances, then a pre qualification is really all you need.. your loan officer is not going to spend his resources on a file he doesn't think will close.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Nov 18th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,439 contributions

New rules went into effect on Oct 3rd. Their refusal to do a full pre-approval is a bad interpretation of those rules. Most lenders will still do a full and regular pre-approval. I will, and we lend in WI. Visit me at www.WI-MortgageBroker.com

Nov 18th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,106 contributions

It depends on who you speak with. There are plenty who still offer pre-approval letters, but to truly get a real pre-approval you will need to supply your income and asset information and have it reviewed by underwriting. Some will offer a pre-approval letter with less, it just depends on the company. If you choose to go with a lender or broker instead of a bank you might see some different results locally. However, even on this page Yvette with Johnson Bank said they still do pre-approval letters. Keep looking and reach out to some of the local loan officers here. Best wishes, Sean

Nov 21st 2015
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