Pre-Qual letter - 50$?

marys1000April 14, 2008

How much do people normally pay to get a pre-qual letter?

I called the credit union I have banked with since I moved and they said 50.00

I don't remember paying a fee last time.

And how long are they good for? If I search for 3 months, I could spend a lot of savings during that time period which would change things I would assume - but who would know? Do realtors/buyers make you get an updated one? Does the bank/cu recharge?

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terriks

I have never heard of a lender charging a fee for a pre-qual letter. I would look elsewhere.

    Bookmark   April 14, 2008 at 8:03PM
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cordovamom

I've never been charged a fee for a pre qual letter, maybe it's something new?

    Bookmark   April 14, 2008 at 9:19PM
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notrafficinga

Well, since they're not originating mortgages, they've got to make money somehow :) ...

    Bookmark   April 14, 2008 at 9:24PM
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triciae

Mary, I've never heard of a pre-qual letter fee either?? Then again, things are getting weird out there so who knows...?

However, I do know that DH's telling me their decline rate has moved to over 50% in the past 30 days. That's way, way over normal. Possibly, if your credit union is experiencing the same fall-out rates...they're finding they can't afford to put the time/effort into doing pre-quals just to have them fall-out so they instigated this fee? Personally, I'd just call & ask them about it. "Hey, is this new? Why? They'll tell you.

/tricia

    Bookmark   April 15, 2008 at 8:18AM
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mfbenson

For fifty bucks they ought to at least actually qualify you, and not just pre-qualify you (which doesn't mean a hill of beans if you're trying to buy near the max the bank says you are pre-qualified for).

    Bookmark   April 15, 2008 at 11:34AM
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mandogirl

Our buyer had to pay a fee to get preapproved for his mortgage to buy our house. I don't know what the fee was. He is also an employee of the mortgage provider (Wachovia), if that makes a difference. I was surprised to hear that he had to pay a fee.

    Bookmark   April 15, 2008 at 12:43PM
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janjan212

We made an offer on new construction with a contengency that our home sells. When they accepted, they asked for a letter showing we were pre-approved. Not Qualified, APPROVED. I even got that for nothing, and no obligation to use the lender either.

    Bookmark   April 15, 2008 at 7:32PM
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heimert

Prequalification is worthless--definitely do not pay for it.

Preapproval has value, but you still shouldn't have to pay for it. A lender should consider whatever steps it needs to take (credit check, modest paperwork) to grant preapproval as a cost of getting a customer. Giving you preapproval makes it more likely you'll use them for a mortgage.

I'd go somewhere else for preapproval. You can always go back to the credit union, but starting out dodgy like that wouldn't make me want to work with them.

    Bookmark   April 16, 2008 at 10:05AM
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elginagent

LOL. Someone must be pulling your leg. Paying for a pre-qual letter? A pre-qual letter is worthless to everyone. Anyone can get a pre-qual letter that states that "this person is qualified for a BILLION dollar loan". Then in the conditions area you'll find that your $700,000. a week paycheck will need to be verified along with a myriad of other conditions.
Don't walk, run away. What you should have is a pre-approval letter that will state that all of your financial info has already been verified and all that needs to be done is a righteous appraisal of the target home. Having a pre-approval is negotiating power for you.

    Bookmark   April 16, 2008 at 1:36PM
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marys1000

Well once I got the confirmation that I either didn't ask the right question or this is not universally accepted practice I called.
This is a 50$ application fee. I.e. you apply for a mortgage with 50$ fee and can either be accepted or denied. Its good for 90.00 days. I should have thought to ask if that meant they would do more calculations for "free" if you had spent half your life long savings on a new toy in that 90 days but didn't.
This is a mortgage group owned by a credit union.

Apparently they don't do pre-qual letters. It costs a 100.00 to run their software, plus time spent running checks etc. so they charge 50.00 and give you a 50.00 credit if you qualify and go through them for a mortgage.
So...whats the difference between pre-qual, pre-approval and approval? Is there one? This full up application sounds like Gary's pre-approval.

    Bookmark   April 16, 2008 at 3:27PM
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marys1000

I asked if they sold their loans and they said yes, to Fannie Mae but retained servicing. Is this selling loans etc. a big deal or not?

    Bookmark   April 16, 2008 at 3:29PM
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elginagent

OK, a pre-qual or pre-qualification letter is based on information that you give to the lender. Based on that info, they will issue you a pre-qual letter with conditions. The conditions are that what you told them need to be verified.
The pre-approval letter is based on the lender actually pulling credit, verifying bank/checking statements, 2 months of pay stubs, etc. Once those things are done and verified, your APPROVAL is subject only to an acceptable appraisal on whichever house you have chosen. Once the appraisal is done, all of the paperwork goes to an underwriter who gives their stamp of approval and on the closing date, a check for a whole lot of money is waiting (or should be) for you at the table.

    Bookmark   April 18, 2008 at 5:01PM
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brickeyee

The letters are not worth the paper they are printed on.
Even if an actual lender issues the letter after having done a credit check they ALWAYS state it is 'NOT a loan commitment' and is subject to underwriting, appraisal, etc.

I can get one with a simple pone call to my lender if I need one.

They just give a little warm fuzzy that the buyer has a 'relationship' (of some type) with the issuer of the letter.

I have purchased places for 100% cash.
I simply wrote a check.

No lender involved.

If you are worried write a tight schedule into the contract for obtaining financing.

    Bookmark   April 19, 2008 at 10:57AM
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linda117117

The letters are not worth the paper they are printed on.

False. Good ones are worth gold. Bad ones can lose you the house in a competitive market.

    Bookmark   June 18, 2011 at 7:00PM
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brickeyee

"False. Good ones are worth gold. Bad ones can lose you the house in a competitive market."

They really indicate nothing.

I can get one for a phone call to my mortgage broker.

They are NOT a loan commitment, and always have weasel words that they do not indicate the lender WILL approve a loan.

As such they mean nothing.

There only purpose is to try and 'reassure' a seller that someone MIGHT qualify.

    Bookmark   June 19, 2011 at 11:37AM
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linda117117

I can get one for a phone call to my mortgage broker

And you most likely have a mortgage history with your mortgage broker and he knows you qualify.

For the rest of pre approval letters, the ones that are "given with a phone call" simply state, "based on information you provided", These PRE QUALS are worth nothing, for the others that state, "based on a review of your credit report and documents you supplied, etc". THEY ARE WORTH GOLD.

It really makes no difference what you as a buyer thinks. Its the agent who has to decide if the letter comes from a reputable bank and/or mortgage company and they want to take the time to run the buyer around. It is also the agent who has the seller that will look at all the offers on the table. The best pre approvals have a shot at getting their offer accepted. A simple pre qual or something printed from the internet, gets the buyer no where.

I've had buyers like you who thought they knew better and refused to give a good pre approval. When they dont get the house they want, their attitudes change.

As for Mary, I've never heard of a bank charging for a pre approval. Im sure you can get one at another bank for nothing by providing your info. I have to wonder, have you gotten several pre approvals from your bank? Perhaps they think you are a tire kicker and are simply trying to stop you from wasting their time?

    Bookmark   June 20, 2011 at 10:43AM
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ncrealestateguy

The $50 is for the APPLICATION FEE, not the pre qual letter... very standard.

    Bookmark   June 21, 2011 at 8:10AM
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brickeyee

""based on a review of your credit report and documents you supplied, etc". THEY ARE WORTH GOLD. "

They are NOT a loan committeemen so they still mean NOTHING.

A 'feel good' exercise at best.

    Bookmark   June 21, 2011 at 9:36AM
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linda117117

They are NOT a loan committeemen so they still mean NOTHING.

A 'feel good' exercise at best.

You're right. They make "me feel good" that my buyer took the time to call a mortgage person. I now know, 1. They are serious, 2. they have good enough credit and income to get a loan

They can't get a committment without a signed contract, they can't get a signed contract without making an offer and they can't get in my car without getting a pre approval. YES, it makes me feel good to know, they have all their ducks in order, and the chances look pretty good that they'll get a committment because they have taken the necessary steps to get "pre approved".

What is so hard for you to understand about this concept Brickeye or are you just being your normal pot stirring self?

    Bookmark   June 21, 2011 at 8:32PM
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brickeyee

"2. they have good enough credit and income to get a loan "

You still do not know this since you do not have a loan commitment.

Just a letter that says that, and that an actual loan will be subject to further checking.

They have become 'standard' in some areas, and do not mean anything.
You could probably run them off (even on letterhead) in a short time.

    Bookmark   June 22, 2011 at 7:31AM
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linda117117

they have good enough credit and income to get a loan

You still do not know this since you do not have a loan commitment.

Wrong again. I do know this, since a PRE APPROVAL LETTER STATES:

BASED ON YOUR CREDIT AND THE DOCUMENTS YOU PROVIDED. It doesnt mean they will get the loan, but it means they at least have the credit and income to qualify for the loan.

A pre qual letter states:

Based on information YOU PROVIDED, (no credit was checked, not documents were provided) this is not a committment for a loan and your information needs to be verified. There is a HUGE DIFFERENCE BETWEEN THE TWO.

Just because its not a committment, doesnt mean its useless. It is the first of many steps in obtaining a mortgage. Without that "useless" piece of paper, your offer isnt taken seriously.

    Bookmark   June 22, 2011 at 8:51AM
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cmarlin20

All this new bickering (same old thing) because of spammer resurrected a three year old thread??

    Bookmark   June 22, 2011 at 12:27PM
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linda117117

Cmarlin, you are right. I didnt even notice the dates. I'm done "bickering" and/or sparring. Some people just argue for the point of arguing. (same old thing) :)

    Bookmark   June 22, 2011 at 12:47PM
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ncrealestateguy

We all know that when brickeye goes to buy a property, that he has to present a pre qual or pre approval letter or a proof of funds letter. Just like the rest of us.

    Bookmark   June 22, 2011 at 5:06PM
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