Skip to Content

Pre-approval Letters – Short Version Summer 2022

Hello, I wanted to do a video about pre-approval letters, it’s a really critical topic, I have done a longer one that’s done in great detail, you can see that one below… If you wanna take the time you should, it’s a really important topic, but here’s the highlight, most important fact about pre-approval letters is that many of them are not pre-approval letters, they’re really pre-qualification letters, loan officers will do a quick analysis, pull a credit report, maybe even get some documents, but unless the file is submitted formally into the loan processing and underwriting workflow and an underwriter reviews it and pre-approves it, it’s not a pre-approval, loan officers don’t have underwriting authority. If we look at something, we can give you our opinion, but that’s a pre-qualification letter, if you wanna be sure that you’re looking at a pre-approval letter, whether you’re a listing agent or you’re a buyer agent representing a buyer, if you don’t want the buyer to get in trouble if you don’t wanna take an offer as a listing agent, not knowing if it’s really a stable borrower has really done with their financing, ask one question, was this file fully processed through your loan processor and underwritten by a human underwriter? If the answer is yes, then you’re looking at a real pre-approval letter, if they start to talk about, well, we took a really hard look at it.

0:01:22.8 Speaker 1: Who’s we? I put the loan through the… I ran it through the automated underwriting system. Underwriting the automated underwriting software, it doesn’t approve loans, the human underwriter does ask if a human underwriter has pre-approved the loan, that’s the central question to ask when you’re vetting your pre-approval letters. I hope that helps. And watch the more thorough video, if you’ve got the time. It’s really excellent. There’s a lot more detail on that one. Thanks.