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Pre-approval Letters devalue like the dollar!
As the value of the dollar continues to crumble so too does the value of the pre-approval letter. For a long time we wrote, as Brokers, a pre-qualification letter and we gave that to the consumer. This letter was the letter that they would show to their Real Estate agent and it would accompany the offer. Then the boom came and Real Estate agents were swamped and so were we so the need for a PRE-APPROVAL letter became the dominant force.
Let me pause for a moment and explain the difference. A pre-qualification letter can be given to any walking soul that states they have a job, decent credit, and some money in the bank. It is generally issued based on a conversation versus documentation. Pre-approval letter's are issued after the loan officer has taken a full application and reviewed the credit report, income documentation and assets. A pre-approval letter is a further form that may even involve an automated approval prior to writing them. (This is what I do in the current market).
So, what I was saying was Pre-approval letters used to mean something when the offer was written. The dollar used to be a force among all currencies ... more

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