How much weight should carry a letter of pre-approval?

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I have a letter of preliminary commitment from a lender very easily. I understand that funding for the loan quota may have on the demand, the credit evaluation, underwriting ist.So say, the loan to value, income to debt, everything else is on the house chosen for the purchase size. the pre-approval letter, a strong indicator that is – if anything w / The property lies to hide selected and the borrower has nothing to hide – the lender to the borrower has adopted the “smell test “w / regard to his own personal finances and credit qualifications for a loan?

  1. Reply
    Common Sense
    May 2, 2011 at 3:20 am

    None. A mortgage requires dozens of steps. A pre-approval letter is step 2.

  2. Reply
    May 2, 2011 at 4:15 am

    “Pre-approvals” are carrying less and less weight as time goes on. The reason ? Because NONE of the information provided by the borrower is verified by the potential borrower. A pre-approval ASSUMES that the borrower information provided is truthful, complete and accurate. History is now showing that such is not always the situation. Thus, less credence is being given to such pre-approvals than in times past.

    Understand that the lender involved can only allow a ‘passing of the smell test’ if all of those smells are readily apparent.

  3. Reply
    Beverly S
    May 2, 2011 at 5:04 am

    If you gave all info accurately then you are fairly safe. However, if taxes & homeowners insurance is higher than expected, or if you buy anything new on credit, or have an inquiry, or pay something late or the rates go up- what you have in your hand is not valid. I would say 80% of pre-approvals are good.

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