Home Loan Approval Letters: 3 Common & Avoidable Mistakes

1. Your loan approval letter is from an out of area lender

With inventory as low as it is, it’s become commonplace for South Bay homes to receive multiple full priced offers. Listing agents choose how to move forward based on a handful of factors, one of which is the relationship they have with the potential buyer’s lender. If your approval letter is from an out of town lender, you will be at a significant disadvantage to those who received pre-approval letters from trusted local lenders.

2. You have a pre-qualification letter, not a pre-approval letter

If you haven’t taken the time to go through the pre-approval process, then you are doing yourself and the other parties a disservice. Unlike pre-qualification letters, pre-approval letters show that your assets, income, and credit have been verified, meaning the offer you’re making on the home is well-substantiated.

3. Your loan approval isn’t tailored to the specific home

The best lenders will help the listing agent and seller understand that you’re able to qualify for their specific property and that you’re prepared close on time. A quick phone call and pre-approval letter tailored to the home can make all the difference in the world when it comes to getting your offer accepted.

Want more tips on how to win in a low inventory real estate market? Watch my new video below.


Sign up to get “My Two Cents.” It’s a blog where I share my thoughts on everything related to real estate finance.