Can I get a pre-approval with Contingencies?
Nope. Not from me. Well, that's not entirely true. Every loan 
pre-approval that I issue has contingencies that usually read something like "subject to final underwriter and investor review", "subject to completed satisfactory appraisal", etc. Every loan can fall apart at any given time due to no fault of involved parties - I remember back in 2007 I had a buyer pre-approved for a niche program - they found a home, wrote an offer, and it was accepted on a Tuesday evening. Wednesday morning, I received notice that the lender was discontinuing that product. There were no other options in the market. For situations like this, lenders HAVE to issue pre-approvals with "we can't be held liable if this doesn't happen" verbiage.
Beyond that, though, there won't be many contingencies on my pre-approvals. Why? Simply put, if you need contingencies cleared for loan approval, then you aren't pre-approved. What an oxymoronic pre-approval letter that would be - "Mr buyer, congratulations! You're approved to buy a home as soon as we clear up these issues that prevent us from approving you!".
This topic comes up because I'm working with a borrower with a tax lien that must be paid prior to us giving them a mortgage. They are in a lease-purchase situation (ugh...another blog post for another day), and of course deadlines have passed & buyers are trying to avoid losing a home they've invested money into (ugh again....I'm sensing a "lease-purchase disasters" blog coming sooner than later). They suggested "I think the sellers might be flexible with a pre-approval, can you just issue one that says we're pre-approved and just need to take care of some things before closing?". Nope. Not gonna happen.
I will gladly give someone a realistic time frame on when they can be approved if they take certain actions, and share that info with a seller if the buyer would like me to, but I can't start sliding down the slippery slope of "contingent to" pre-approvals. Could I then give a pre-approval to someone with a 400 FICO score, saying "Congratulations, you're pre-approved to buy a home! Your mortgage pre-approval is only contingent upon a FICO score increase of 200 points".
Buyers are either able to get financing, or not. EVERY buyer can EVENTUALLY get financing, but a pre-approval is a here & now, submit your loan today and it'll be approved, kind of commitment from me to my buyers and their agents. I won't step on a slippery slope of promises and risk my reputation to real estate agents and potential clients with faulty pre-approvals. If a buyer has a pre-approval from me, it's good as gold. It's a way I separate myself from competition, build trust with my referral partners, and keep clients happy with a smooth-sailing loan process. If there are issues to address, we'll do that before a pre-approval is issued, not after.
Want a pre-qualification? Visit any mortgage company website and input some numbers. Want a pre-approval that's going to show a seller you're serious, prepared, and motivated? Give me a call at 484.680.4852 or use our purchase assistant to get started.
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