Mortgage preapproval letters have become a standard practice in the home buying process. Most sellers would like something of substance from a lender stating that you actually have the means to buy their house before making it unavailable to other buyers. Why take their house off the market and go into contract with you, when you could potentially waste weeks of their time only to not qualify for the mortgage. So while this is a common question from clients, the answer is that almost everybody needs a mortgage preapproval letter.

That being said, it is important to understand what a mortgage preapproval is, and is not. It is a letter stating that, assuming all of the information stated by the borrower is accurate, then the lender would be able to make a loan. The letter is, however, not a promise to write a loan or a fully underwritten document. So just because you get a preapproval, it does not mean that you will get the mortgage.

Now, the better the loan officer, the better the preapproval letter. And what I mean by that is, the more experienced the loan officer is, and the more care he or she puts into creating that letter, the more likely the borrower will actually qualify. When I write a preapproval letter, for instance, it is based upon hard facts and my nearly 15 years in the industry. I know what my underwriters are looking for, I know what will and will not fly, and I can do a good job of making sure I am sending out quality preapprovals. But not all lenders do the same; I’ve even come across some online sites where you simply punch in some numbers and it spits out a letter.

So if you are in the market for a house, and need to get a preapproval letter, I would recommend finding a knowledgeable, trustworthy loan officer who can give you a good idea as to whether or not your loan will work. Because what good is a preapproval letter if it isn’t based upon your situation?

If you have any questions about getting preapproved for a mortgage, please contact me. If you have anything to add about mortgage preapproval letters, please leave a comment.