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Hello MyFico family,
I'm hoping you all may be able to help me with this. I'm currently interested in an REO property. The listing states that a pre-qualification letter (not a pre-approval letter) is required to be submitted with all offers. I've already been pre-approved with another bank who has been absolutely great to work with and who I intend on obtaining financing through.
From my understanding, a pre-qualification letter is not difficult to get. A credit check is not required and all you disclose is your income and your debt and the loan officer puts in a letter how much house you qualify to buy. Therefore, getting the letter is not the issue.
Here's the problem: I always have my loan office submit a pre-approval letter that states I'm preapproved for slightly more than the price I'm offering on the house. If I'm required to submit a pre-qualification letter, then the bank will know the maximum amount of home I qualify for and then (I think) use this information to their advantage during the negotiations.
Can someone shed some light on this for me? Has anyone gone through a similiar experience?
Just have them put in in the letter the amount you intend on offering. That's what we did.
I know through Chase Bank a pre-qualification letter is only given to you after you have passed thru DU.
My LO said Chase no longer gives out pre-approval and only pre-qual letters after your credit is checked and submitted to DU.
Good Luck...
That's what I'm afraid of.
There was another REO property that I was interested in that required a pre-approval from a specific bank before you could submit an offer. Because of this single requirement, I decided to not place an offer on it. That house had been on the market for going on 6 months and I'm assuming that pre-approval requirement has a lot to do with it.
If Wells Fargo does require me to go through the same hoops for a prequalifcation that I did to get a preapproval, then I won't place an offer on that property either.
What's the point of the requirement anyway? In this market, it seems like it would cause the bank to lose potential buyers.
@Heavanly1 wrote:That's what I'm afraid of.
There was another REO property that I was interested in that required a pre-approval from a specific bank before you could submit an offer. Because of this single requirement, I decided to not place an offer on it. That house had been on the market for going on 6 months and I'm assuming that pre-approval requirement has a lot to do with it.
If Wells Fargo does require me to go through the same hoops for a prequalifcation that I did to get a preapproval, then I won't place an offer on that property either.
What's the point of the requirement anyway? In this market, it seems like it would cause the bank to lose potential buyers.
I had to do this with a few offers. In my case it was called a "cross qualification". Basically my LO sent over everything she had along with our pre-approval letter. We also showed we were approved for more, but that has no bearing. You offer to pay only what you want!!