Home Mortgage Preapprovals

A recently released federal report seems to indicate that lenders are scaling back on using mortgage preapprovals.

Mortgage preapprovals, are written commitment in which the lenders date the maximum loan that home borrowers can get and the likely interest rate.

Here in San Diego, such written mortgage preapprovals, are pretty much standard operating procedure when submitting a home purchase offer.

The federal government data shows that the top 25 mortgage lenders issued approximately 29,912 preapprovals which resulted in mortgages used to purchase homes last year. That number of preapprovals is down from 101,626 issued in 2007, before the housing crash.

I personally consider the mortgage preapproval vital in considering the probability of a successful close of escrow when accepting a purchase offer contract. Yes, here in the San Diego California market, pre-approvals are a must when a buyer is making an offer. Listing agents won’t waste their time with an offer that doesn’t at least have a pre-qual letter with it. Of course cash is still king, but a pre-approval letter is the next best.

Home Mortgage Preapprovals