Dumb mortgage question. Possibly googleable.

[hannamaren]

But I will ask here because I dont want to disappoint my fans. 

Our pre approval ran out last week. I didnt reapply until yesterday. Usually takes 1-3 days for approval. If I see a house today and want to make an offer, can I just make an offer without the condition of "getting pre approved" (I am 99.9% sure of approval since nothing has changed in 4 mths) 
the reason I would prefer no conditions on my offer (except inspection) is that there will be multiple offers so we would need to be an easy offer. 
So can I skip the pre-approval condition despite not having pre approval? I assume it would just mean that if for some reason we arent approved, I still have to pay for the house. 

Yes, I realize that I may not see a house today, but it is more of a curious question. 

[Deleted]

I think it's fine. Since the condition is usually "financing" which is different from pre approval. They scrutinize everything more closely before guaranteeing the actual mortgage, pre approval requirements (my understanding anyway) aren't very strict.

And if you can't get financing you can't be forced to buy the house (unless the seller wants to not sell while it goes through the courts which in a hot market they probably won't) but they would be able to keep your deposit.

[Susie]

We didn't have a pre-approval condition, we only had an approval contingency in our offer. We submitted the pre-approval letter with the offer only to substantiate that we were serious, qualified buyers.

All of our offers contained the following approval contingency language:

This agreement is contingent upon Purchaser obtaining approval of a [Conventional / FHA / or VA ) or ____ mortgage loan of $_________ for a term of not more than ____ years at an initial ___ fixed or ___ adjustable nominal interest rate not to exceed ___ percent. Purchaser agrees to use diligent efforts to obtain said approval and shall apply for the mortgage loan within ___ business days after the Seller has accepted the contract.
Purchaser agrees to apply for such mortgage loan to at least one lending institution or licensed mortgage broker. Upon receipt of a written mortgages commitment or in the event Purchaser chooses to waive this mortgage contingency, Purchaser shall provide notice in writing to _____ of Purchaser's receipt of the mortgage commitment or of Purchaser's waiving of this contingency. Upon receipt of such notice this contingency shall be deemed waived or satisfied as the case may be. In the event notice as called for in the preceding sentence has not been received on or before ____, then either Purchaser or Seller may within five business days of such date terminate, or the parties may mutually agree to extend, this contract by written notice to ____. Upon receipt of termination notice from either party, and in the case of notice by the Purchaser, proof of Purchaser's inability to obtain said mortgage approval, this agreement shall be cancelled, null and void and all deposits made hereunder shall be returned to Purchaser.

[Deleted]

We had to submit proof of pre-approval with our offer. I'm not sure if that was something that was particular to our realtor, but we didn't make an offer until we had the pre-approval letter from our credit union. In your case, I would think saying "on condition of pre-approval" and then maybe submit a copy of your expired pre-approval if necessary? That would indicate to the seller that your approval just ran out and therefore there shouldnt be any issues getting pre-approved again.

[rubytue]

You probably will still have a financing contingency, but that is for final approval and applies even with preapproval.

The problem you might run into is when the sellers are comparing offers. Usually you submit your preapproval letter so they have more confidence in the strength of your offer. But I'd just put the old letter in there and hope for the best.

[awick14]

Even with a pre approval you may not get financing.

You would still have to have the condition of finances.

[Deleted]

Jan 25, 2013 10:36:21 GMT -5 @mrsbecky07 said:

We had to submit proof of pre-approval with our offer. I'm not sure if that was something that was particular to our realtor, but we didn't make an offer until we had the pre-approval letter from our credit union.

I would not work with a realtor who made me submit my pre-approval letter with the offer.  You lose your bargaining power unless the price you are paying is equal to what your approved for.  Nothing like letting the seller know you were approved to pay more!

[Deleted]

Jan 25, 2013 10:48:41 GMT -5 flygirl said:

Jan 25, 2013 10:36:21 GMT -5 @mrsbecky07 said:

We had to submit proof of pre-approval with our offer. I'm not sure if that was something that was particular to our realtor, but we didn't make an offer until we had the pre-approval letter from our credit union.

I would not work with a realtor who made me submit my pre-approval letter with the offer.  You lose your bargaining power unless the price you are paying is equal to what your approved for.  Nothing like letting the seller know you were approved to pay more!

Ha I can see that, but that was not what happened - we ended up with a good deal. Our REA was awesome.   Although truth be told I can't remember if we did submit the letter, or if she just wanted a copy of it for her records before we put the offer in. Either way, it worked out well for us. 

[LoveTrains]

can you just ask the people that did your pre-approval letter to write you a new one with a new date on it? That is what we did. It took like two hours to get a new one via email.

[LoveTrains]

Also I will add that when we were doing our short sale, we had to get a pre-approval letter that said we were specifically approved for the amount of our offer to submit to the seller's bank. But that might been part of the short sale package.

[goaskalice]

Jan 25, 2013 10:48:41 GMT -5 flygirl said:

Jan 25, 2013 10:36:21 GMT -5 @mrsbecky07 said:

We had to submit proof of pre-approval with our offer. I'm not sure if that was something that was particular to our realtor, but we didn't make an offer until we had the pre-approval letter from our credit union.

I would not work with a realtor who made me submit my pre-approval letter with the offer.  You lose your bargaining power unless the price you are paying is equal to what your approved for.  Nothing like letting the seller know you were approved to pay more!

Actually, I usually have my buyer's lender send me a letter particular to the property and the price for which they are offering. That way the seller does not know their top price. Here if you don't submit a pre-approval letter, the seller would definitely think of the offer as weak. Anyone can say they're pre-approved. 

[rubytue]

Jan 25, 2013 11:05:40 GMT -5 goaskalice said:

Jan 25, 2013 10:48:41 GMT -5 flygirl said:

I would not work with a realtor who made me submit my pre-approval letter with the offer.  You lose your bargaining power unless the price you are paying is equal to what your approved for.  Nothing like letting the seller know you were approved to pay more!

Actually, I usually have my buyer's lender send me a letter particular to the property and the price for which they are offering. That way the seller does not know their top price. Here if you don't submit a pre-approval letter, the seller would definitely think if the offer as weak. Anyone can say their pre-approved. 

I've never had a problem getting my loan officer to send me a new letter that showed the offer price. Around here, you won't be taken seriously without one. Heck, I've had sellers try to get me to give the equivalent of a loan application with an offer (I refused).

[Deleted]

When we sold our seller just attached the cheque for his deposit. That was good enough for our realtor, but deposits where I am are usually MUCH higher then what I see posted on here.

[Deleted]

Jan 25, 2013 11:05:40 GMT -5 goaskalice said:

Jan 25, 2013 10:48:41 GMT -5 flygirl said:

I would not work with a realtor who made me submit my pre-approval letter with the offer.  You lose your bargaining power unless the price you are paying is equal to what your approved for.  Nothing like letting the seller know you were approved to pay more!

Actually, I usually have my buyer's lender send me a letter particular to the property and the price for which they are offering. That way the seller does not know their top price. Here if you don't submit a pre-approval letter, the seller would definitely think of the offer as weak. Anyone can say they're pre-approved. 

I think getting a letter specific to the buying price is a good idea, especially in competitive markets, but essentially its a rather stupid requirement since it doesn't mean much. The buyer still has to go thru the complete process of getting fully approved.  We had many people who would get pre-approved and then their financing would fall thru because they a)lied about their documentable income b)had other erroneous bank issues/liens c)one borrower had crappy credit (before when they intially pulled the first person).

[goaskalice]

Jan 25, 2013 11:30:19 GMT -5 flygirl said:

I think getting a letter specific to the buying price is a good idea, especially in competitive markets, but essentially its a rather stupid requirement since it doesn't mean much. The buyer still has to go thru the complete process of getting fully approved.  We had many people who would get pre-approved and then their financing would fall thru because they a)lied about their documentable income b)had other erroneous bank issues/liens c)one borrower had crappy credit (before when they intially pulled the first person).

I agree. One of my buyer's last year was that person, and it was frustrating for everyone! We got almost through underwriting and they found something they didn't like and refused to lend to her. It was a mess. But, since lending standards are just getting more strict, sellers do rely on pre-approvals as a way to weed out the serious buyers. 

[aurora]

We also always had a letter specific to the property to avoid losing bargaining power. I think it's fine to try to submit your expired-by-a-couple-of-days pre-approval letter, but if the seller has multiple offers yours won't look as strong.

[kathybela]

Pre-approval aside there can also be issues with the property itself that will affect whether or not the bank will finance, for this reason I would never advise not having financing & insurance conditions.

I know the Toronto market moves fast and sellers prefer no conditions but there have been cases where deals have fallen apart because the insurance companies will not approve the property and no insurance means no mortgage. For this reason I highly recommend that any offer you make include conditions of financing, home inspection & insurance.