Is a Pre Approval an Approval? Mortgage Financing
MortgagesInVancouver.com Too many people making offers on homes are getting themselves into trouble thinking that their PreApproval that they got from the bank is an actual Approval. To sweeten offers they are taking off Subject to Financing and then getting locked into a contract with no money to back up the purchase because their financing has fallen through. Pre Approvals are not Approvals. Period. Getting a full approval from the bank is actually quite time consuming for underwriters (the people at the banks and lending institutions) and to take this much time on “non live” deals makes it silly from a cost stand point. So then what is a pre approval and why should you bother getting one? Well first off, it helps you to get a general ball park figure about what your are potentially worth to a bank. Then you can add that to your down payment and hand it to your Realtor and start looking at houses. If you go as far as to get a Pre Approval in writing from them it can also lock you into whatever today’s low rates are for 90-120 days depending on the institution. This is obviously a huge benefit as well but again, it does take a day or two (depending on the institution) to get and if you go to banks directly they may not offer that up front unless you ask. Now what is the difference between walking into your bank and going to a Mortgage Broker (a Good Mortgage Broker)? Obviously the Broker is aware of their own hours too and doesn’t want to waste them but typically a …
Solid Post about Pre Approvals for Mortgages. I encounter this problem all the time as well.
Thanks! Maybe others out there wont get stung by this like I did by my very OWN BANK! I was so mad. I will call you if I need a pre appoval next time. I was so mad I even changed banks. What a hassle