Shopping w a Pre-Approval that Will Stand UP

It's really disturbing (across the industry) to see how many people's "preapprovals" are NOT converting to "full financing approvals." When a pre-approval falls apart, it affects everyone that is a party to the transaction. It's often embarrassing, frustrating, and stressful for the purchaser, and the truth is that it can almost always be avoided. The key to not finding yourself in this scenario is to ensure that the person you have engaged to do the pre-approval both knows how to do one (correctly) and is willing to invest the time, money and resources to do so.

Unsuspecting Buyers Are Increasingly Getting Into Trouble (It's Not Their Fault) While it may not sound like it makes sense, a Pre-Approval Letter from any bank or brokerage is not worth the paper it is written on if the procedure was not followed correctly. In the same way, a "Mortgage Committment Letter" with unfulfilled funding conditions is also not worth the paper on which it is written if the conditions cannot be fulfilled to the lender's satisfaction. Working with a bank employee, mortgage agent, or broker at a well-known mortgage brokerage does not guarantee that an application for pre-approval or approval will be completed and processed correctly. It should, yes, but it doesn't translate in reality.

In all honesty, if you don't ask yourself at some point during a "properly done" financing approval process whether all of this information and the paperwork being requested is necessary, then chances are pretty good that the person managing the process is either missing or skipping steps.

Red Flags

Being told traditional mortgage financing can be done in less than 30 days

Not being asked for paperwork to confirm both income and down payment during the pre-approval process.

Being referred to an online calculator for your pre-approval

In today's lending environment, the lender's credit department (where the decisions are made) will only thoroughly review a mortgage application if every required supporting document accompanies it. The information recorded in an application carries no weight unless it can be supported by specific documents as requested by the lender. Every lender requires the same supporting documents with very minor differences, if any. The "blue lender" doesn't make it easier to get approved than the "green or orange lender" does. If you hear anything contrary, this should also be a Red Flag.

When the person you are relying on to arrange your financing either misses or even skips steps to make it easier for you, you may be investing both your time and money under a false sense of security, only to find out later in the process (possibly on the day of funding) that your mortgage lender is not prepared to fund. It is remarkable how many people only find out a day or two before their closing date that they do not have fully approved financing.

When financing falls apart, the borrower is left to choose between defaulting on their purchase, asking friends or family for help, or securing expensive private lending financing to close their transaction. We don't want to see this happen to you.

Don't hesitate to reach out at your convenience; we actually do care :)