Profile picture for A_bowers

Lender says he can pre-qualify us but not pre-approve us until we find a house. Is this normal?

Our Lender ( who is a mortgage broker) says that we can only get pre-qualified until we find the house we want to buy. At that time, once he has the address, he can get us pre-approved. He also cannot give us a good faith estimate till then. Is this normal? This is a VA loan We are planning to sell our house but don't want to sell it if we don't qualify for a loan.
  • July 16 2013 - US
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Answers (7)

Profile picture for Stacey Feltman
Every lender talks with a buyer and takes only 30 minutes to pre-qualify.  Find a home then when a contract is executed and sent to lender that is when he requires full documentation from you and will provide you with a GFE with different rates/lender credits.  They need the address, taxes, HOA information, year built for insurance etc. 
  • July 17 2014
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Profile picture for Sharon Lewis
There are a lot of 'normals' Why not just ask the lender. I agree though, why do you need to be preapproved. Hopefully you have told them the truth, not disclosed any income . Do NOT at this point buy a new car or open or close any credit cards. 
best of luck to you going forward.
  • July 17 2014
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Yes but they could go through the majority of the process, including reviewing assets, income and credit and have you 90% of the way there before you are officially pre-approved.
  • July 16 2014
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Profile picture for KeiLAW
Normal, they need to know the property taxes, insurance HOA fees etc before they can give a good faith estimate.
  • July 17 2013
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Yes, this is normal.  A pre qualification letter means the mortgage broker has spoken with you about your finances and has made a pre decision that you'd qualify up to an amount. This is a necessary tool to use when you find the home you'd like to call your own.  It shows the seller that you've taken time and the steps to know you can afford his home.  Once you write a contract and it's been accepted, in Va, you have 5 days to apply for a loan and furnish the necessary documents the lender needs to make final approval.  You will receive the Good Faith estimate from them in this time too so you're aware of what the loan will cost you. They will send out an appraiser to make sure the home is worth the loan amount. VA has specific standards for the appraiser to follow making sure the buyer is protected.
They are: Safety, Soundness and Sanitary. VA loans are a wonderful benefit to those who qualify for them in appreciation for service.
  • July 17 2013
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Profile picture for nwhome.us
If you work with a lender who portfolios their loans your per-qualification will look a lot more like a pre-approval. Technically a pre-approval requires identifying an address and indicates that more information has been gathered and an underwriter has been identified.  You shouldn't need that level of commitment (on both sides) in order to plan a purchase or a sale. The only advantage comes up when you are making an offer and competing with a buyer who only has a pre-qualification.
  • July 16 2013
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Profile picture for Tony Ngai
Yes, that is the norm.  Getting a pre-qualification letter will allow you to start searching for your home.  Once you have identify your home, that is when you start the pre-approve process from your lender.  3 days after you actually apply for the loan, you should receive a GFE from them.

http://frozenpeafund.com/the-mortgage-loan-lending-process/
  • July 16 2013
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