I've been pre-approved for a mortgage, but is this normal?

Question

I got pre-approved for mortgage with a local mortgage company where I live. They said they will only send out the pre-approval letter once I find a place to make an offer on because they need that address and cannot send it without that. Is that normal?

Answer 1

No,,, this is not normal. They should give you a letter of approval that you can show to your sellers. The letter normally will not show the amount you have been pre-approved for. They should give you this letter so you can give a copy to your Realtor and submit with any bids you make on a property.

Answer 2

Yes.  It's normal.  You will also want a letter specific to the home you are making an offer on with the amount of the offer as the "you are pre-approved for a loan on home..." You wouldn't want a letter saying "You are pre-approved up to $200k" when you're making an offer on a house that's $160k.  It's actually a good thing for you, as long as they can fax those letters pretty quickly.

Answer 3

When I got a pre-approval letter at a local bank (in 2002), they gave me a copy I could take with me.  But I did pay them $300 to lock in the interest rate, and that would go towards full credit check and appraisal if I did get a loan with them (which I eventually did).

But the whole credit situation has changed since then, so maybe they want to do a quick soft credit check at the time before verifying pre-approval (especially if it did not cost you anything) in case you rack up another $10,000 on your credit cards in the meantime.

Answer 4

basically yeah - they aren't going to approve you offically until you have a house with a specific price and have make an offer that is accepted - for example - what if they said you're approved for $150,000 and give you an approval letter, but then you go out and put an offer on a house needing a $180,000 mortgage??? you weren't approved for a 180k mtg - only 150k, - that's why they need specifics

Answer 5

That is odd. Preapprovals aren’t normally specific to a property. You should be able to get a general copy of the letter.

I’d find another lender to work with.

Answer 6

No, it is not.

Be very careful.  You can get a pre-approval without having a property address or exact purchase price.  What others have said is true about not wating to negotiate with an open ended amount, however, you can always get the letter amended.

In the meantime you don't really have anything to prove you really are pre-approved.  Get something so you can be sure.

Answer 7

Yes,   They want the loan to value ratio.  The lender will not give you  a letter of credit (blank check) without knowing what you are trying buy.  When they do send you a pre-approval letter it will likely have the property address affixed.

A lender is like any other business - they have to manage their risk.

Answer 8

little odd- pre-aprovals letters are general info. Only approval letters who came directly from the lenders ( not from mortgage broker) some of them require address of the property. Maybe this is this broker inside policy to do not give costumers pre- approvals?

Answer 9

pre-approved it just for you to know that you might be able to qualify for the rate and term that they told you. You still need to supply them with other information so they can give a an accurate rate and term.  If you still shop for loan, look into this web site.  They have low fee and you can see all the fee with nothing hidden.

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