Does your pre-approval sound too good to be true?

Recently I dealt with a couple customers that were shopping around for a pre-approval. These customers were dealing with a hand full of lenders, some of whom were not shooting them straight. It is my opinion this was just done out of laziness! The borrower came to them, gave them their information verbally, and then lender issued either a verbal or written pre-approval. After shopping around she found that this particular lender had a much lower rate and a much higher approved purchase price. I took a look at her situation and this pre-approval she was counting on as her best deal just didn't seem right. It seemed too good to be true! I told this customer that if this deal is what she says it is, then she needs to take it! I would love to have your business and would value it, however I cannot offer you a better deal. Sure enough, this lender wasn't thorough enough in the pre-approval process and they were off base on the approval. She came back to us and we got the deal done. It wasn't the deal she initially thought she could get, but it was the best loan out there for her! Always remember, most lenders have the same basic products. The difference comes in the manner these products are delivered to the borrower!

This scenario happens quite often. If you really read the pre-approvals, you can see where there is room to wiggle out of them if some piece of the puzzle doesn't come back as expected. Unfortunately when a lender is lazy and issues a pre-approval letter like this, it wastes peoples time. In their eyes I guess they feel they will be able to lock down first dibs on their business. Worst case scenario for them is that they can't do the loan. However, worst case scenario for the buyer is that they are out the time and money it cost them to find this out the hard way instead of finding it out initially.

You can take what you want from this short scenario. Just use a little common sense in comparing quotes from lenders. If one is drastically different, do a little extra homework on the lender. Hammer down all the details to make sure everyone is on the same page! If you do this, it could and probably will save you some unnecessary hassle!

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