Comments on: Are you really preapproved or just prequalifed for a mortgage? Part 1

By: Rhonda Porter

Rhonda Porter — Mon, 31 Aug 2009 03:38:49 +0000

Thanks, Craig. I’m amazed how many people I talk to who assume that becaue a good faith estimate is provided to them, they think they are preapproved (or even prequalified) or locked in for the loan.

Makes me think that HUD should have added a “block” to the new GFE stating:

( ) you are preapproved for this scenario
( ) you are prequalifed for this scenario
( ) this is just a quote of rate and fees available at this moment.

By: Craig Ballhagen

Craig Ballhagen — Sun, 30 Aug 2009 21:41:36 +0000

Borrowers need to know the difference for their own protection and piece of mind-thanks for all of your postings

By: Rhonda Porter

Rhonda Porter — Thu, 27 Aug 2009 21:41:29 +0000

I agree and that’s my point with the posts I wrote (series of 2) about prequal vs preapproval. There are too many what ifs, ands or buts involved in the process now. We’re pretty lucky to have in-house underwriting and it may take a little longer to produce a preapproval letter, however it’s at least worth more than the paper it’s written on.

By: Rita R

Rita R — Thu, 27 Aug 2009 21:23:33 +0000

I think it is wrong for originators to issue “preapprovals” without having ones file fully underwritten. Not taking the steps required can have devastating effects on clients who are so exited to buy only to find out later that they truly do not qualify.

J.H
Voyage Home Loans

By: Are you really preapproved or just prequalifed for a mortgage? Part 1 | Prequalify Loan

Fri, 25 Jan 2008 09:51:38 +0000

[...] Are you really preapproved or just prequalifed for a mortgage? Part 1 There’s quite a difference between being prequalifed for a mortgage and preapproved. The letters that Loan Originators provide when requested for a prequal or preapproval may appear very similar. In fact, I’ve talked to borrowers on the phone who thought they were actually preapproved, when all t… [...]

By: Are you really preapproved or are you just prequalifed for a mortgage? Part 2 | Rain City Guide | A Seattle Real Estate Blog...

Sun, 14 Oct 2007 16:28:08 +0000

[...] Are you really preapproved or are you just prequalifed for a mortgage? Part 2 October 14, 2007 A preapproval is the next step after becoming prequalifed. Essentially, this means that you are supplying all of the documentation that is required to support your loan scenario. Everything you have told the Loan Originator needs to be backed up for a “full doc” loan. The LO will review your documentation (W2s, paystubs, asset accounts, credit report—tax returns if you’re self employed or paid commission…etc.) and make sure that they have a strong file for the underwriter. Once you have selected your mortgage program, your information is typically submitted to an AUS (automated underwriting system aka a computer) which produces “findings”. The findings detail what type of documentation is required for the loan commitment. Sometimes the findings will require less or more documentation than a LO has obtained. Unless the transaction is 20% down with 680 credit scores, these days, I’m having our “live human underwriters” validate the findings (this means they’re comparing what the computer has spit out to what documentation the borrower has provided me). [...]

By: Rhonda Porter

Rhonda Porter — Sat, 06 Oct 2007 20:27:56 +0000

Thanks Greg. I tend to do more preapprovals than prequals. Usually borrowers have been pretty serious about wanting to present an offer. I do have one FHA “prequal” currently.

By: Greg Perry

Greg Perry — Sat, 06 Oct 2007 20:17:34 +0000

Rhonda,
Thank you! Well written for the consumer.

How many pre quals vs. pre approvals are you issuing? I don’t go shopping with a buyer until I have the pre-approval in hand.