Pre-approval example

[das317]

Does anyone have a pre-approval example they would be willing to share? I currently have a lengthy one that I am trying to shrink into a 1-2 page and am curious to see what other look like.

[Greg]

Mine is very basic. I think sometimes people confuse Pre-approval with Approval/Commitment.


<Company Logo>



January 21, 2006

The Customer Name



Dear Mr. Customer,

Congratulations on being approved for your mortgage loan with Home 123 Corporation.


I apreciate the opportunity of helping you with the financing on your new home. Good luck in your search and I look forward to hearing from you when you find the home of your dreams!

If you have any questions, please feel free to call on me at 866-658-7078 Ext. 229.

Sincerely,



Gregory A. Phillips
Senior Loan Officer




Cc: file

[das317]

Thanks Greg. So do you not ever have a problem with that since it does not lay out purchase price, loan amount, interest rates? I am a broker and a realtor as well, so I know when I get a pre-approval, I expect it to match up to the mortgage contingency in the agreement of sale. So I should be able to figure out the ltv, based on their contingency amount and the purchase price and then I expect to see on a pre-approval that ltv at a minimum. Also on the agreement of sale it has an interest rate and a maximum interest rate, so I expect to see that to so that I know the loan they are getting approved for falls into the rates atleast as of that day.

[tarasevich.r]

I always put the loan amount, type of loan program, and "market rate" for an interest rate.

[The Wizard]

Greg,

Do you put a disclaimer on your approval? Such as subject to final verification of collateral, employment and assets?

This way you CYA yourself.

[Greg]

I do not put loan amount to protect the customer from agents advising contract refusal in knowing the buyer is approved for a higher loan amount. When they bid I add the approval amount to it if requested but I only make it coincide with the offer amount.

Interest Rate is never disclosed to any 3rd party unless the customer authorizes it.

I verbally state or email a rate to put on the contract. (estimated)

Now the commitment letter is 4 pages. Very long and drawn out.

[HisHouseMortgage]

I agree, there is no reason to list the terms of sale to the Realtor. This is confidential information between you and the client. I have seen many times the Realtor convince the client to shop elsewhere because he felt the client was not getting a good enough rate or terms. The Realtor was never aware of the reasons for the higher rate such as prior BK, Self employed stated, ect. Here is the letter I use, Hope it helps.

Mr. Tom Client
Mrs. Karen Client
321 Your Street
Mytown, MI 12345



Dear Mr. & Mrs. Client

Thank you so much for your interest in Bretlin Home Mortgage. We are delighted to have you as a customer and will strive to make your home financing transaction as smooth as possible.

Please allow this letter to serve as your notification of pre-approval for a mortgage loan for the purchase of your new home located at 123 Main Street. Anytown, MI 12345. This, Bretlin Home Mortgage pre-approval demonstrates that you are a credible and serious homebuyer with the financial strength of Bretlin Home Mortgage in your corner.

Your credit report and other required information has been received, input into the computer system, reviewed by an underwriter and accepted. This approval is subject to a satisfactory appraisal of subject property and review of title-work.

If you have any questions please feel free to contact me. I look forward to working with you through this process.

Sincerely,

Jim Johansen
Bretlin Home Mortgage


Good luck