Did You Know There Are 7 Different Kind of Approval Letters?
We really liked Greg's post and particularly the sense of humor. Although, it is usually not humorous when we get some of these pre approval letters. But thanks Greg for added a chuckle to our day!
There are currently seven different kind of approval letters. It all depends on who you get the from and under what circumstances.
Here they are.
1. The on the spot pre-qual letter that's generated online from your favorite bank.
This is the easiest to obtain. You can enter whatever you want online and as fast as you can say "We're here to help" is about the length of time it will take to become instantly approved. This document is almost worthless, but not entirely. You can use it to start a fire, make an airplane or wad up and throw it across the room at your spouse as he or she bends over to make the bed. No listing agent or worth their salt will accept it.
2. The "No-Worries" approval letter.
This is different from number one. It's an actual pre-approval letter! The lender spoke to the buyer for about 22 seconds and based on his vast experience and special "gutt" powers they are able to get a really good feel for this buyer. These rushed approval letters are the most common. They are expected to be taken more seriously because the loan originator actually "signed it."
3. The "Think I Can" Approval Letter.
Most FHA approval letters are from buyers who have a 640 credit score or better. Even though FHA isn't credit driven. This is the mother of all approval letters. The buyer is rounding third base with a 630 mid-score and going through credit restoration. The Loan Officer is telling everyone....... "don't sweat it, I got this!" All the while the buyer, buyer's agent, seller and listing agent are making plans & moving forward as if this is a done deal. Only the buyer and buyer's agent are privy to this "God I hope this file closes!!"
4. The "Never Gonna Happen Approval Letter."
This one is easy to spot, but unfortunately still seems to find a way into a sellers hands. Over and over again people fall for it. There IS NO PHONE NUMBER for the loan officer, nor is there an email address. There is no contact information and the address for the bank is a p.o. box in another state.
6. The "None Of Your Business Approval Letter."
Sometimes there are people who believe getting approved is all but beneath them. In their head only small people need prove their financial worthiness. Instead they grab bank letters signed from the bank president that reads..... "he's good for it."
Finally there's the best approval letter of all time.
It has the Loan Officers name, email, cell and office number. You can reach out and touch them. They work locally and are available on the weekends. Because deals are often negotiated on NON-BANKER days like SATURDAY, SUNDAY AND AFTER FIVE during the week. The loan officer has reviewed debt to income, verified assets, looked at all possible pit-falls and has provided a GFE when they are required. They let the buyer know UP FRONT what documents they'll need. They have done their due-diligence and have educated EVERYONE involved about the type of loan. They are even so kind to reassure the Listing Agent what they are legally allowed to disclose... things like... YES, I have actually received a loan application.
Anything worth doing is worth doing right upfront.
It's better to tell a buyer to "wait" six months to qualify than to wing it and piss off so many people. One torepedoed deal can hurt so much. Including hopes and even DREAMS.
The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.
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