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How reliable is a pre-approval letter when getting a mortgage?

by BSampson from Newark, Delaware. Apr 17th 2013 Reply


Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

That all depends on who is actually writting the letter. I take this part of the mortgage process very serious. I dont want clients putting in offers to buy homes that they will later be denied for. The more paperwork that is reviewed in the begining the better your chances to close are. I would not trust anyone that only pulled your credit and didnt want to see tax returns and ask some questions. www. HOMEMORTGAGEXPERT.com 855 411 LEND Peter Savino

Apr 17th 2013
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Fairly reliable.. a "Pre-Approval" is nothing more than an experienced loan officer looking at your credit, income, assets, and job, and based on his experience, is stating he can get financing.. ultimately, it's the lenders "Underwriter" who makes the final decision.. keep in mind that VERY FEW lenders will fully underwrite a borrower prior to them finding a home and submitting a full loan package... there's just too much time involved in the process... I'm not saying no company out there will do it,,, just not many... Also, from experience.. most competent loan officers wont issue a pre approval if they didn't think they can get you financing.. their time is just as valuable as yours.. so if they issue you a pre approval, it's probably solid... .. 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. 480-287-5714 WilliamAcres.com

Apr 17th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,265 contributions

The simple answer is, it depends... The vast majority of Pre-Approval Letters are written by Loan Officers, and only after the Loan Officer has reviewed the information. Almost zero are reviewed by Underwriters. So the quality of the approval letter is really dependent on the quality of the Loan Officer. Are they new? Are they really just a bank application clerk, are they a 20-year experienced and licensed Loan Officer like myself?? I've screamed this for years. Find a good Loan Officer, and you have nothing else to worry about. Find the guy "quoting" the lowest rates, and take a gamble. www.JoeMetzler.com

Apr 18th 2013
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Charlie Sparks (CharlieSparks)
#9 ranked lender in New Mexico - 401 contributions

If the letter is from an underwriter that reviewed your credit, assets, last 2 years of tax returns, employment history, etc. then I would say it is very reliable assuming these factors don't change before closing. If it were written by a loan officer it would depend on how much of the above documentation they have and if they truly analyzed income/debts/credit, etc.

Apr 17th 2013
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Carlos Figueira (carlosfigueira)
#108 ranked lender in New Jersey - 199 contributions

If you are dealing with an EXPERIENCED loan officer you will have no issues and there approval letter should be accepted by all realtors etc. If not an experienced L.O. normally there office would not allow them to issue approval certificates and a underwriter or VP would sign it upon there review of your file.

Apr 17th 2013
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John Barbato (blueelephant)
#4 ranked lender in Delaware - 26 contributions

What the lender does prior to issuing a letter regarding your mortgage qualifications, will determine the reliability and value of the letter. Asking the proper questions, evaluating your credit and reviewing any appropriate income documentation. Ask the lender(s) that you have made application with, what they do before providing the letter. Your part and responsibility in this process is full disclosure of all information and documentation requested/required and making sure you do not make any significant changes to your financial situation or large purchases/new debt. Read your letter(s) too, as they should state what the qualified terms are based on. If there are any concerns or potential concerns, they should be addressed and discussed upfront so there are no surprises for anyone involved. One of my offices is right near you on Limestone Rd and I would be happy to help you as a local lender, whether you need an approval or a second opinion, just give me a call. John Barbato302-632-3500john@johnismylender.com

Apr 17th 2013
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

In most cases its not worth the paper it was written on unless the file was reviewd and approved by an UNDERWRITER.

Apr 17th 2013
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John Thomas (delawaremortgages)
#7 ranked lender in Delaware - 16 contributions

A pre-approval is really as good as the bank that is making the pre-approval. Some lenders really only do a pre-qualification rather than a pre-approval but call it a pre-approval. A pre-qualification is when someone checks your credit and asks you what you make and how much money you have but never asks for documentation to back it up. A pre-approval should consist of the following:1) Credit check to make sure FICO score and items on report meet loan guidelines2) Verification of employment & Income with Pay stubs, W-2 forms, and tax returns3) Verification of assets with bank statements and retirement account statements4) Running the loan through automated underwriting system and getting an approve/eligible or accept/eligible response if not then loan needs to be sent to an underwriter for a credit approval as a manual underwrite5) Verification of Identity with Photo ID per Patriot Act and Anti-money laundering law6) State which loan program approved for such as FHA, VA, USDA, etcIf this is all done by an experienced loan officer then you have a legitimate pre-approval.If you have questions or would like to get pre-approved feel free to call me at 302-703-0727 as I my office is located in Newark, Delaware.John R. ThomasNMLS 38783Primary Residential Mortgage248 E Chestnut Hill RdNewark, DE 19713302-703-0727 Officehttp://www.DelawareMortgageLoans.net

Apr 19th 2013
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