@Revelate wrote:
@Anonymous wrote:
@Revelate wrote:Had another thought.
Since any random person can throw together a "pre-approval" and God only knows what they did to validiate it, is the only real information on the entire letter simply the contact name of the banker on the assumption the listing agent / seller will contact them to verify the information presented?
Technically, that would be a pre-qualification letter. A bona fide pre-approval should only be issued once every piece of document has been verified. Personally, I don't issue anything in writing unless it is a fully validated pre-approval. A pre-qual letter may as well be toilet paper
.
Admittedly this is just you and may not apply to anyone else; however, what do you go through on a pre-approval for verification purposes, and is it before or after the application fee?
Many thanks!
I don't have an application fee, and I don't get paid a penny until the loan closes. The only item my client must pay for upfront is the appraisal. As far as official verifications (VOE, VOD, etc.), those are all done in underwriting. For issuing a pre-approval, I require all documentation in-hand, but I will not verify with the employer or bank until the file is in UW.
@Anonymous wrote:
@Revelate wrote:
Well I have some questions now that I've gone through part of the process.
Is there a new standard where basically all you can get is a pre-qualification? Chase, gave me a pre-qual letter labelled "pre-approval" (under assurances) that left me shaking my head, and the CU won't take it further unless I have a executed purchase agreement... which of course I don't have. The gave me a "pre-approval" letter but haven't verified any documentation as of yet; maybe I'm being too simplistic, in my worldview there's stated assets / income / employment, and then there's documententation supporting that which has been verified by someone as legit. First would be prequal, second would be pre-approval, if I'm wrong on any of this please set me straight.
Is this just a move by the industry as a whole? Is nobody doing what I consider to be an actual pre-approval anymore as a cost savings measure? Did I miss a step, was I supposed to pony up the application fee before this when I was under the impression that was for full underwriting?
How long does it take to look through a couple of W2's, financial statements, W2's and tax returns and stated employment history?
I may have a huge misunderstanding in this process, like Saturn sized.
Reading through the last few posts (I saw your pre-qual letter, too, before you deleted it), I must admit I'm a little mystified by your situation with the pre-approval letter. I know you're in California and I'm East Coast, but things really shouldn't be that different, should they? During my mortgage process I switched lenders midstream, but both issued me a pre-approval letter within a day or so. I got a quick verbal pre-qual from both of them within minutes of allowing them to pull my credit reports. Once I uploaded my W2s, tax returns, pay statements, bank statements and other misc things they wanted, I got a pre-approval letter in the amount I asked for - literally within a day or two. After that, every time I was preparing to make an offer I made a quick call to my LO and he reissued the pre-approval letter using the asking price. The pre-approval letter was one of the easiest steps in the process for me.
I'm sitting on Saturn with you, now. I don't get it either.
Did hear a suggestion from a buddy that there's a marked difference between a purchase shop and a refi shop... part of the confusion might be I suspect the majority of Chase's mortgage product is focused on refinances and that may be what I'm running into. My employer is one of these so I know they exist.
Thinking at this point I may open a third front, get a LO that really knows his stuff and is a purchase place (and I know one of those), don't really care what the APR is as long as I can reach the price point I want on an given place, and then plan to refi in six months much like the auto loan advice pretty much everyone gets. If it's this much trouble and confusion to start, not sure I can count on a lender not to waffle at closing.
Going to let this offer run one way or the other and then reset, retool, and rearm.
I didn't really understand the RE's desire to include score and financials, but seeing how this has gone, it's pure gold given the "pre-approval" (sigh) letter I submitted it with... see for yourself sellers, I can do this. Wouldn't have thought that necessary before doing this but it's a seriously useful hedge if the lender the customer brings to the dance has two left feet.
I do get the lender's "this is just what we do" but come on guys, you're doing it badly. Chase LO told me they were losing deals and so they no longer did the contingent approval UW step on a regular basis, but now I just want to slap them... guys, this is at least one reason why =/. Why not take the marketing details and work for your customer instead of against them? There's enough data out on the mortgage process now online that I think just about anyone would look at that letter and think "huh?"
Does not inspire confidence.
@Anonymous wrote:Question for you and the other lenders, how much time do you typically spend with a client?
I enjoy the education piece of lending just as much as I do closing, so I tend to spend a little more time with my clients. An initial meeting will typically be from 45 minutes to 1.5 hours depending on the client. I also always make myself available via phone, text, or email to answer any questions. So if I had to put a number on it, I'd say anywhere between 3-10 hours of communication per client on average.
When we really get down to it, how much of this really can be verified without contacting the employer (or the payroll processor), the banks and other asset repositories, and the IRS for the tax transcripts (good luck with that currently)? Is it in fact still a pre-qual because I'm the one turning over all this information rather than their verifying it from the reference sources? I had assumed the reference sources was in fact underwriting.
A pre-approval (what we deem sufficient to submit to underwriting) is proof of documentation without verification from employer, depository, etc. The actual VOE, VOD, etc. is done during underwriting. So, unless you forged your initial documents or your situation has changed drastically (quit your job), those initial documents tend to be accurate.
Does the term pre-qual vs. pre-approval really not mean crap until you go through UW anyway since the terminology is apparently horredously loose and that's just with a sample size of two? How disparate is it over the 1000 or so mortgage lenders?
For me, pre-qual doesn't mean a thing. It doesn't (shouldn't) allow you to make offers and typically there is limited or no documentation behind it. The loose attitude you are describing is most often affiliated with big banks. Most direct mortgage lenders will agree that only a pre-approval has relevance.
Thank you sir! Much appreciate the info from the other side of the transaction!
@Anonymous wrote:Sorry I'm late to the party and just seeing this! We finally got keys to our new place late on Wednesday night and have been moving and cleaning like crazy people until yesterday. I haven't posted much about our nightmare buying experience (in SoCal too - but in San Diego), mostly because I've just been too stressed and exhausted since we got involved with the house we eventually closed on (offer submitted March 24th w/28 day close and JUST closed last week after four missed closing dates due to the sellers issues and the title company). I will post about it eventually though....when it becomes foder for a funny story over drinks. LOL
We actually used a VA loan to purchase, but like you, we were looking in the $600+ sqft price range for homes out here. It's crazy how fast the market has been moving and how people are still paying 7 figures for fixer uppers. The last home purchase I did alone (before I met my husband) was in Texas. There, in 2008, I bought a custom 3500sqft home for less than half of what I paid for our cute 1926 craftsman we moved into this weekend (and not even half the size). All that said, I understand just what you are delaing with out here! I think your offer was submitted very intelligently given that you only had a pre-qual letter. My lender actually gave me/our Agent a few different pre-approval letters with different price points on them since homes were moving so fast and we were actually making offers while we were touring homes and our agent was using her IPAD (every home seemed to be in a bidding war too - it seems out here it is expected that people are making offers on multiple places at the same time as well). This meant we could look strong (submitting pre-approval letters 30-40k higher than our offer or list (most offers were over list) at a moment's notice. We actually used a Redfin agent and I'm very happy we did. I stalked the MLS via redfin, but also found a lot of homes driving my target area and looked for "coming soon" signs - that is common here and they seem to go up 7-10 days before the property hits MLS (and usually under contract when that happens). On a sidenotee about Redfin, I just got my 6k check in the mail for using them/her as well - win win all the way around.
Anyway, all that said, I can't wait to follow your journey here and hope you end up with good news very soon!
Many good ideas in this!
Smart lender, hopefully I'll manage to get one of those after reset... even Chase could be made to work but I'm seeing they just want the customer to put some skin in the game (and if it's $500 for taking it through the UW tour before placing an offer, ok that's a bargain in the competive market place... but I had to know the right questions to ask to get there and I wasn't sure I needed it. Probably isn't the LO's fault, it's just Chase boilerplate, and that's something I can likely work around if I have enough information).
How does the making multiple offers to different places at the same time work? Make the offer, if it gets accepted great, and any follow on ones you just welsh on? So sorry, it's been retracted? I know pretty much what I want (though that may change based on market realities) and it's a really small cross-section... which means next time I submit an offer I may need to just go someone big on it and see about locking everyone else out and understand I may need to fund part of the appraisal difference out of cash or negotiate with the seller to reduce it. Doesn't strike me as altogether ethical but this current tour is a canary for all sorts of things.
Least coming down off the ledge I was on last night, appreciate the feedback!
@Anonymous wrote:How does the making multiple offers to different places at the same time work? Make the offer, if it gets accepted great, and any follow on ones you just welsh on? So sorry, it's been retracted? I know pretty much what I want (though that may change based on market realities) and it's a really small cross-section... which means next time I submit an offer I may need to just go someone big on it and see about locking everyone else out and understand I may need to fund part of the appraisal difference out of cash or negotiate with the seller to reduce it. Doesn't strike me as altogether ethical but this current tour is a canary for all sorts of things.
Least coming down off the ledge I was on last night, appreciate the feedback!
In the offers, there was a contingency about making multiple offers and how an offer made may be retracted if another offer made was accepted first. Or something similar to that! Our agent said it was standard language and felt comfortable with us making 2-3 serious offers (with 72 hour response times requested) at a time since answers were being given from sellers so quickly and this particular area is a really hot market. She also always called the seller's agent and told them we were seriously interested in the home and it was our first choice to start our lives together but found another home that we liked enough as a back up that we were going to put an offer on as well in case a veteran newly married couple wasn't their first choice after all (more agent selling!) . It seemed to work - we got positive responses each time (meaning it always seemed to come down to us and one other buyer for a best and final on the three we put offers on) - the ultimate house we liked the best and responded to/increased our 'best and final' offer on was the one we ended up purchasing. Now, we didn't play any games with putting in offers on homes we weren't prepared to write an earnest money check on right away. We just knew without that immediate offer we wouldn't even be in consideration. I spent a lot of time, like you, in figuring out exactly what area I wanted to purchase in and stalked the MLS and drove the area often. After watching list prices, sold prices, time in market, reviewing comps for 3 months, 6 months, 9 months, etc. we were ready to move ahead and knew that within a couple of weeks, we wanted to be under contract. We strategized and then it was go time! LOL At first our agent wanted to show us homes and do the traditional home search thing, but after I explained exactly where we were in the process and what we wanted to do going forward, she was absolutely on board.
Hope all of that makes sense as I explained it!
Makes fantastic sense actually. Question for you, do you think the contingency helped get sellers to consider the offer somewhat quickly and make you look like a better prospect on the theory if you're still shopping then this isn't a "got to have" and you're serious about finding a home ASAP?
Might not be a bad thing to put in as a boilerplate actually, did find out that 3 days was pretty standard for Cali when I looked (it was already written in to the offer), will ask that of my own RE even though I had no personal contingencies on this go around.
Learning new tricks, always good for navigating the mortgage market Thank you again!