Profile picture for bmelancon3

How did I get a pre-qualifing letter from my lender, then lender say I'm not qualified?

Lender submitted pre-approval letter to agent for a house I bid on. I paid 5000.00 earnest money today and by this afternoon the lender wanted some disputes on credit removed before moving forward. Isn't this supposed to be disclosed before I make an offer and secure the offer with money? The disputes will clear on the 17th of this month, but if I remove them I have to start all over with the dispute process.
  • May 14 - US
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Answers (5)

Profile picture for Ask Cathy
Unless a person is a cash buyer there is no guarantee. Pre approved is always better than pre qualified. Its probably something that can be worked out between an experienced lender and experience agent that's representing you. It may take a little longer than expect but shouldn't be a total road block. It is not uncommon unfortunately. 
  • May 15
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Profile picture for wetdawgs
In your title you use the word "pre-qualification" and in the text you use "pre-approval".  these are not synonymous, and perhaps what you've discovered is when the lender investigates further than done for the initial pre-qual that there are some aspects that need solutions before you can move forward with a loan.

Even with a pre-approval, other things can be discovered during the loan process including  underwriting, so pre-approval is not an approval.  
  • May 14
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A pre- qual letter is based on sketchy info normally taken over the phone or by simply asking a few questions. Once the lender digs deeper into your credit and amount of debt you have items can and will arise. Many times you don't get full qualification until Days before closing. Listen to the lender they will advice you, you can always ask your agent to extend the closing date if needed.
  • May 14
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Profile picture for bmelancon3
Thank you
  • May 14
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That's something you should ask the lender, but my guess is that since assets, liabilities, debt to income ratio, etc., is not verified in a pre-qualification (only in a pre-approval or when you actually sign paperwork with the lender), you either forgot to tell your lender something or they discovered something that made you miss the mortgage guidelines. The only way you'll know for sure what happened is to ask your lender.
  • May 14
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