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

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.

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.

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.

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.

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?

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

A 'feel good' exercise at best.

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?

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.

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.