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How dependable are mortgage preapprovals?

by starry.eyed89982 from Delaware City, Delaware. Apr 7th 2015 Reply


Colby Neal (ScottsdaleInsurance)
#111 ranked lender in Arizona - 71 contributions

Confirm that the lender has the borrower (and co-borrowers) paystubs, bank statements, W2s, and most recent two years tax returns. Most importantly confirm that the lender has a DU approve/eligible through Fannie Mae's desktop underwriting system. If all those items are received, then all the due diligence the industry requires has been completed. In turn, the pre-approval letter is as dependable and reliant as one could ask for.Direct Lender: www.imortgagelending.com

Apr 7th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,224 contributions

It really depends how complicated the borrowers situation is, how accurate the information is that was provided on which to base the preapproval, and how much information might have been actually reviewed as part of the process.

Apr 7th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,797 contributions

For the most part, they are fairly accurate.. if you provided all your supporting documentation to your lender prior to the pre approval, then it's typically very accurate.. however understand that in today's lending environment, the underwriters are under great pressure to be sure that every t is crossed and every I dotted.. it's possible your loan officer missed something that might be found later in underwriting, but that's usually not a deal breaker. .. 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

Apr 7th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,446 contributions

A mortgage pre-approval can be good, or it can be junk. The pre-approval is NOT A LOAN GUARANTEE. Rather, it is supposed to be that you have applied with a lender, they have reviewed your application, credit report, and supporting documents like pay stubs, W2's, and bank statements. I spoke with a client yesterday who told me he was shopping. He said he already had a pre-approval letter from a large bank with a stage coach in the ad's, and a big internet lender is is "quick". Both of those places NEVER reviewed any supporting documents, yet both had given a pre-approval. After I reviewed his documents, I dramatically reduced his maximum home approval price because he was only at his job for one year, and about 25% of his income was commission, and 75% was guaranteed base. That could have been a disaster in the making... So simply this, understand that 10% of the success of your loan process is the company you choose, the other 90% of the success is the Loan Officer. Be sure you choose correctly, and if you have never given them your supporting documents, you are NOT pre-approved. For loans in MN, WI, and SD - Contact me at www.MortgagesUnlimited.biz

Apr 9th 2015
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Chris Neuswanger (mtnmortgageguy)
#94 ranked lender in Colorado - 84 contributions

I assume you are a seller and this would be a conforming Fannie or Freddie loan. About the tightest preapproval involves submitting the file to what we call desk top underwriting, which entails inputting the borrowers income, assets, employment history and credit report and then either a denial or approval is generated contingent upon verification of the info and the appraisal. Biggest problem is sometimes the lender doesn't ask all the questions or the borrower doesn't know the accurate answer. Garbage in/garbage out s they say. The lender needs to confirm they have reviewed actual income and asset information and run desktop underwriting. If they just took the guys word that he makes so much and his bank balance is so much, you don't have much more than a official looking stack of papers. If the info input is correct AND the appraisal comes in then you probably are pretty safe.

Apr 7th 2015
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Ron Pippin (RonPippin)
#26 ranked lender in Utah - 156 contributions

you may have heard the saying "garbage in, garbage out". If a lender is providing a "pre-approval" with limited information, it's not really a pre-approval. Lenders really need a full application along with supporting documentation (pays stubs, tax returns, bank statements) and possibly additional information depending on your situation. They should then obtain an "automated underwriting" approval. (there are cases where an approval can be obtained when an automated approval can't be issued, but guidelines are strict). Bottom line is, provide as much information as your lender requests. Only then can a true preapproval be issued and relied upon. Ron Pippin. www.HelpMeWithAMortgage.com

Apr 8th 2015
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Pete Bass (PeteBass)
#31 ranked lender in Connecticut - 476 contributions

That depends on the loan officer that you choose. For a true pre approval you will need to provide the loan officer the following documents-Last 2 years Federal Tax Returns( all schedules) & w-2's if you are a wage earner, most recent 30 days paystubs ( if you are a wage earner) most recent 60 days bank statements, a review of your credit, etc....if you meet the parameters of the loan, then you receive a true pre approval that realtors want. Strong pre approvals have been know to sway a seller to give your offer more attention. e-mail me at pete.bass@everbank.com for more information

Apr 8th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,106 contributions

It depend on how much information the borrower supplied for the lender to review. Most pre-approvals out there are only based on the loan application, credit report and running it through an automated underwriting system. However, to properly give a pre-approval the lender should review the borrowers income and asset information. A lot of lenders will also provide TBD approvals, where you submit the entire file, minus property to underwriting to receive a true underwritten pre-approval.

Apr 8th 2015
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