Are pre-approvals worth the paper they are written on? Today we are taking a closer look.
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Is a pre-approval letter from a lender worth the paper that it is written on? I am here to answer that question today.
This is very relevant if you are a home seller or a home buyer. From a home seller’s perspective, a good agent is going to require that any potential buyer has a pre-approval letter from a lender who has taken a look at the buyer’s finances and determined that everything is in order.
“I like to take the guesswork out of a lender’s hand and trust my expertise when it comes to determining a buyer’s affordability.”
How reliable are pre-approvals? In my experience, not very. It is a bit of a roll of the dice because there are so many lenders out there. If it is not a reputable, local lender, things can get tricky. When I represent a home seller, I require them to get approved with the lender that I use as well. Secondly, I require proof of finances to prove they actually have the money, as well as their credit scores. I like to take the guesswork out of the lender’s hand and represent my clients to the best of my ability.
For home buyers, you want to make sure that your lender is asking you the right question and for the right documentation. You don’t want a pre-approval letter after five minutes of talking. It is a bit of a process.
So whether you are buying or selling a home, you need to make sure you are working with a good agent who does their homework. If you are thinking of buying or selling a home any time soon, please feel free to give me a call or send me an email. I look forward to hearing from you soon.
