That Mortgage Pre-Approval Letter Ain’t Tellin You Nothin! 5 questions to ask the Lender

Mortgage and Lending with - Legend Lending NMLS #293883

All realtors know that the "pre-approval" letter is what tells you that a buyer is pre-approved for a mortgage.  No two letters look the same, but you can bet they will have the buyers name, sales price, loan to value, owner occupied, etc.  Some letters may tell you more or less.  A buyer being pre-approved is only half the battle.  Here are 5 questions you should ask their lender:

1.       What type of Loan?- Is it FHA, VA, Conventional, HomePath, USDA, etc.  Some homes won't qualify for certain loans, is the home approved for USDA, is the Condo FHA approved, is the home a fannie mae foreclosure. 

2.       Seller Paid Closing Costs- Each loan program mentioned has a different % amount that the seller can pay toward closing costs.  Do not assume, ask the lender for the exact amount that is allowed

3.       Needed time for Closing- Every lender has different time needed to close a loan.  And each loan type takes a different amount of time.  Before making an offer ask them how long it will take to close.  Hopefully the lender is honest on the time needed and you can prepare all parties to close in that time.  The last thing you want is to have a contract set to close in 30 days and the lender takes 45 days to close a specific type of loan

4.       Pre-Approve them for this SPECIFIC Home- A pre-approval letter is great to have.  But did the lender pre-approve them for the highest they can afford?  How do you know they estimated the right amount of taxes?  Before making an offer, ask the lender to also pre-approve them for the specific home.  It takes all the guess work out.  I do this on every pre-approval letter I provide.

5.       Did You Check out their Tax Returns?- It is impossible to have a lender look at tax returns every time they do a pre-approval.  But, some situations require it.  If your buyer is self Employed, the lender should definitely look at their last 2yrs tax returns.  When someone is self employed they tend to think they make "X" amount but this is usually before expenses and write offs.  A lender should also be looking at tax returns if the buyer has rental property(s).  A rental loss counts against someone's income.  This can also affect their pre-approval. 

Just because a buyer has a pre-approval letter, does not mean there are not other questions to ask.  Especially if you have not worked with the lender before or they are off the internet.  A little bit more work, will save you headaches later. 



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David Krichmar 

Mortgage Banker NMLS#293883 

Legend Home Lending

LLC NMLS #229421

Has Written For Realtor Magazine, Houston Agent Magazine, Scotsman Mortgage Guide

Appeared On Fox Business


Named 5 Star Mortgage Professional 2013, 2014, 2015, 2016, 2017

Named Top Mortgage Professional 2010,2011


For More Mortgage Info Follow me at  Dave's Blog


If you are looking for a FHA, VA, USDA, Homepath, Conventional, Jumbo, Construction, FHA 203k mortgage in Fort Bend County, Sugar Land, Houston, Katy, Harris County, Brazoria County, Pearland, Richmond, Bellaire, West University, The Woodlands, Kingwood, Friendswood, Clear Lake, Galveston, Fulshear, Tomball, Spring, Conroe, Montgomery County or anywhere in Texas I am your GUY!  


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Juan Bassett
Long & Foster - Germantown, MD

All good points David. I appreciate the post.

Jun 23, 2011 06:37 AM #1
David Krichmar - Legend Lending - Sugar Land, TX

Thanks Juan. 

Jun 23, 2011 06:38 AM #2
Fred miller

Good post David.

Jun 01, 2012 01:33 AM #3
David Krichmar - Legend Lending - Sugar Land, TX

Thanks Fred!!

Jun 01, 2012 02:28 AM #4
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