Financing in Jacksonville>Question Details

Ashleyvictor…, Other/Just Looking in Jacksonville, FL

If a lender has given me a pre-approval letter, is it possible that they will not actually approve me for a loan once I find a home?

Asked by Ashleyvictoria, Jacksonville, FL Wed Mar 17, 2010

Assuming nothing has changed with my income, credit, etc...

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Ashleyvictor,
The simple answer is yes - there may not be a loan approval after you find a home. An easy way to solidify the approval and guard against future guideline changes to to submit your file for a credit only approval. This allows your file to go completely through the underwirtting process and gain a full mortgage commitment letter with UW signatures.
FHA guideline changes usually are based upon the date that your FHA case number is assigned and the date of UW approval. If a full credit approval is granted before the guideline change you are typically exempt from the new rules for a period of time - i.e. you may have 90days to close before the rule change becomes applicable.
Hope this helps. Feel free to contact me with any quesitons.
Keven M Brennan
kevenbrennan1@comcast.net
1 vote Thank Flag Link Thu Mar 18, 2010
Debra, it seems like you are giving a lot of misleading or incorrect information. If you google HomeBanc, you will find that they may have declared bankruptcy, but are operation now, and may be very solvent. I don't know them at all, so I wouldn't say anything one way or another about them, but what you are saying is just not fair to them.
And another thing, if I tried to sell my clients a 5.625% rate on a conforming loan, none of them would be stupid enough to take it, and I would have no business. If, however, I told them that I would charge them no fees at that rate, they might want to, and I would be happy to do that because I would make a bundle. In reality, at that rate, I could probably cover the majority of their closing costs including title charges. Most people want the lower rate. At the time you mentioned, I had people closing at 4.875% on a 30 year fixed with limited fees, and it was a relatively small loan by my standards, $187,500, and was on a co-op refi. If you want to talk you clients into the fact that they are getting a good deal, go right ahead. Most people are smart enough to at least get some information via the internet to know that they are not getting a great deal.
3 votes Thank Flag Link Sat Mar 20, 2010
looks like Ms Silverberg is the MAN!
I am putting her on my hero list thumbs up to her
1 vote Thank Flag Link Sat Mar 20, 2010
Yes, absolutely get a preapproval from a Direct Lender (if your preapproval is from a mortgage broker that does not actually lend money). HomeBanc is very honest and reliable and Kristine is well experienced and if they approve you will not be disappointed. Apply on her website below:

Kristine Bredeau, Vice President
Mortgage Branch Manager
HomeBanc
3725 West Grace Street Suite 300
Tampa, Florida 33607
Direct: 813-549-7234
e-Fax: 813-902-6621
email: Kristine.Bredeau@homebanc.com
Apply On-Line: http://www.KristineBredeau.com
1 vote Thank Flag Link Thu Mar 18, 2010
So maybe the better question to ask would be is it likely? I think we have all agreed that it is possible....
0 votes Thank Flag Link Sat Mar 20, 2010
Look at the question below. Anything is possible. These days stuff can and does occasionally go wrong.

The day of the closing the bank sent a email notifing that not going to have a closing because they went out of funds, Is this really happen?
http://www.trulia.com/voices/Home_Buying/the_day_of_the_clos…
0 votes Thank Flag Link Sat Mar 20, 2010
In regards to the remark/incorrect answer below about Homebanc being a Bank. It is NOT a bank, they are a Bankrupt Mortgage Corporation and one should not trust them to deliver anything. Read more about it at the link below.
Locate a true solid profit reporting BANK such as BBVA-Compass who reported a porfit in 2009 to Wallstreet in January for total profit of $5.3 Billion. While other banks such as B of A and Wachovia were busy taking TARP money, and taking our country further to it's knee's !!!! Buyer's BEWARE !

HomeBanc files for bankruptcy - Atlanta Business Chronicle:
HomeBanc files for bankruptcy ... HomeBanc Mortgage Corp., Atlanta's largest independent mortgage company, has filed for Chapter 11 bankruptcy protection. ...
atlanta.bizjournals.com/atlanta/stories/2007/08/06/... - 81k - Cached

So, if a solid Bank gives to you a pre-approval or approval letter you can bet they will certainly deliver on what they stated in the letter.
The Sr Loan Officer at BBVA that my client used was Tom Callahan at cell 904-591-6722.

Good luck to you. DB
0 votes Thank Flag Link Sat Mar 20, 2010
HomeBanc is a Bank and I just had a closing yesterday and my firefighter client was very happy with the service, rate and fees. They may not have a local office in Jacksonville but they are equipped to provide service throughout Florida.

HomeBanc can also provide a lender committment letter to you. The commitment letter will help you when bidding on bank owned foreclosures because it gives a higher level assurance of your ability to obtain financing than a fly-by-night mortgage brokers's letter.
0 votes Thank Flag Link Thu Mar 18, 2010
A preapproval is based on what you told the lender. If you were not honest about everything, all debt etc then of course after the credit check you can be turned down. If you have a full approval and do not change or make better your debt and credit score, it would be rare that you would not get full approval.
0 votes Thank Flag Link Thu Mar 18, 2010
Ashley,

Today's lending environment is unlike anything we have seen in a very, very long time. Unfortunately, getting through underwriting and to the closing table for most buyers presents challenges and hurdles that most of the time can be overcome. The best thing to do is speak with a reputable lender who has a representative here locally (for example, speak with a Wells Fargo loan consultant who is here in Jacksonville). We have found that having the ability to walk in and meet with someone, drop off paperwork and just that face to face contact makes the process so much easier, especially if questions/issues arise. You are better served with a reputable company, because truthfully, you get what you pay for. If you need some recommendations for people to speak with, please let me know. Prepare yourself that it will take some effort on your part to pull documents and paperwork, etc. to get through the process, but keep in mind it can be done!

Again - if I can be of assistance, please let me know. Best of luck to you.

Jill Streit
Broker/Manager
904-285-1800
0 votes Thank Flag Link Thu Mar 18, 2010
Ashley,
You should make note that :
a. HomeBanc is not in Jacksonville,Fl any longer, it just did not work for them in the local market and they are not a bank. Therefore it is not thier money they are loaning, meaning they answer to an investor which can change your pre-approval.
b. You should deal direct with a strong Bank. Most banks have "portfolio's" in which to place their loans, meaning it is the banks money and they call all the shots, and do not answer to investors like Brokers and Mtg Corp's.
Make note that I recently had a client who was a first time buyer and closed on a outstanding program designed for first time buyer's. The bank is BBVA-Compass and I actually have had many clients use their services and all were pleased and closed on time. Unbelievable programs with 00% - 5% down and No MI, etc,etc at mid 5% range, 30 yr fixed rates.
And the NEW program allows you to skip 5 months of payments after close and BBVA is eating the interest. My client got 5.625%, 30yr , No Origination fee , No bank charges !!! I could not belive it !
The mortgage contact person was : Tom R. Callahan at 904-591-6722 or tom.callahan@bbvacompass.com
You should call him.
I hope this was some help to you. DB
0 votes Thank Flag Link Thu Mar 18, 2010
Alma, a direct lender is going to sell their loans to someone, and if guidelines change, their pre-approval will not be worth the paper it is written on. Ashley's circumstances are not the norm, if you have read her follow-up below.
0 votes Thank Flag Link Thu Mar 18, 2010
These are a completely different set of circumstances Ashley. I don't know of a bank that will allow 2 years out of bankruptcy, but maybe they have one in FL. Most of my loans are conventional or super jumbo, so I am not quite as up on FHA guidelines as some people who post here, but I thought it was 3 years. Even the lender they have could change it to 3 years by the time you find something. If you are talking about having someone build you a home, it could be 6 months until you close, and that could make a big difference. If changes are made along the way, they usually allow any locked loans to close, but not so with loans that are still "floating", which means the interest rate has not been locked yet.
0 votes Thank Flag Link Thu Mar 18, 2010
I do not plan on changing jobs, applying for any new credit, or anything before I close on a home. And I did fully disclose everything truthfully. However, I do have a Ch 7 bankruptcy that was discharged just under 2 years ago. The lender advised that they did have an underwriter review it and the only condition is that I have to wait about 6 weeks before closing on anything because that is when I will be at 2 years from discharge (which will definitely not be a problem since I haven't even located a property yet). I am just concerned that they could change their minds and decide not to give me a loan, although they have already given me a pre-approval letter. I don't want to be embarrassed when I have to back out of a purchase (especially since I am considering having a builder build a new home for me) and I don't want to be dissapointed by getting my hopes up about something that is not going to happen. Should I apply for a loan with other lenders and try to get another pre-approval? I assume that if multiple lenders give me a pre-approval, it is probably more likely that it is not just one lender who doesn't know what they are talking about and I will actually get approved. Does anyone have any lenders they can recommend who work with buyers who have had a bankruptcy? My middle credit score is currently 648. Based on this, I think the only type of loan I will qualify for is FHA.
0 votes Thank Flag Link Thu Mar 18, 2010
Ashley,

Assuming that anything is possible, it could happen but why? If you were truthful, you will probably be OK. A pre-approval is hitting the high spots. There is no actual verification of stated income and liabilities. When people run into trouble, they usually have not totally disclosed their obligations. If everything is on the table and does not change until you get to closing...such as buying a new car that now puts your ratios out of wack...you should be OK.

Debbie Albert
Coldwell Banker Residential
0 votes Thank Flag Link Thu Mar 18, 2010
@ Robin, I had clients relocate to Seattle from CT, and they were the ones who told me how suprised they were that they didn't need to sit down with their attorney and the sellers and the sellers attorney all in a big room. In fact, when we went into the escrow office, they were worried that the room was too small! :-).

Had they had to meet in a big room with their seller and all the attorneys, we would have had cookies and ice cream in there too ... I never saw a seller and buyer bond so much as that transaction! It was a pleasure.
0 votes Thank Flag Link Wed Mar 17, 2010
@ John, well I DO remember Gunsmoke ... kinda.

I know your market is sad, and tough, but it's getting a tad better, right? No? What I am seeing here is more optimism than I've seen in a long, long time.

Body surfing on Snoqualmie would rip your skin off. Unless you were well-clad in raingear, and skiis. Pacific NW cement, for those who have skiied there!!
0 votes Thank Flag Link Wed Mar 17, 2010
We have sit down closings in NY, 3 lawyers and a title closer. You should see how crowded the room gets sometimes. We're lucky if we fit the buyers in. No fist-fights though. I've seen tears, but no fist fights. We're very civilized I guess.
0 votes Thank Flag Link Wed Mar 17, 2010
We never have fist fights- as you may know we have carry permits - its serious.
Your are way to young to remember GunSmoke.

Market is real Ruff here - so much pain - so many hurt people - UGLY UGLY!!!

No Attorneys if we can help it - we send contract to title company, they get loan docs
we close at table - checks are issued. Its wonderful.

I use to body surf off Snoqualmie- and other lies.

John
0 votes Thank Flag Link Wed Mar 17, 2010
@ John, you do a lot of things differently in Florida I hear :-). But the whole of the thing is that the housing market is doing better, and we're all quite thrilled about that - including my friends in Florida!

Do you guys bring in attorneys for buyers and sellers and all sit around the closing table together to sign papers? I can't quite imagine how fistfights don't break out in THAT scenario with some transactions ... :-) !

Happy St. Pat's!
0 votes Thank Flag Link Wed Mar 17, 2010
Leanne,

We do not close to escrow in Florida- we just close.
0 votes Thank Flag Link Wed Mar 17, 2010
If you gave them paystubs, tax returns and everything else that was asked for then there should not be a problem. However, lending guidelines can change, When your loan goes to an underwriter they can ask for other things such as an explanation letter for any credit issues. They will also verify your employment information and your bank deposit information.

I am sure you already know this but don't purchase anything on credit or change careers,
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Wed Mar 17, 2010
Sure! Go buy a couple of cars, a houseful of new furniture and whatever else you please, all on credit, and see just how valid your loan approval letter is after that! :-).

I'm only "kind of" joking. Buyers do all sorts of silly things, and buying new things on credit prior to closing on a new home is juse one of those classic things to "do not do this"!

Keep in mind too that lender requirements can change, with little or no notice. Nothing is for sure until you actually close escrow.
0 votes Thank Flag Link Wed Mar 17, 2010
Tons of things can go wrong.

This is why you need a Realtor (I can not help you so this is not self serving)

if you find a home make an offer, that offer must be make with knowledge of what your lender can and can not do. This is why your lender and your Realtor must work together.

Your Realtor, will do a CMA on the property before you offer, this way you have a good chance of making an offer that will find favor with the appraisal your lender will order.

It's a mine field out here.
0 votes Thank Flag Link Wed Mar 17, 2010
Yes, it is possible.....Believe it or not, sometimes loan officers make mistakes...They may not know all of the pertinent information...Sometimes, they misunderstand a borrower's income situation or misinterpret tax returns. The safest approval these days is after the application has been reviewed, not only by a loan officer and an automated underwriting system, but by a live underwriter, which has the final say. I don't mean to scare you but the answer to your question is, yes, it is possible.....
0 votes Thank Flag Link Wed Mar 17, 2010
The problem is that guidelines change all the time, so there is no way of telling. If you have very high credit scores, and a low debt-to-income ratio, it is likely that no guideline change would make this happen. If things are a bit more tentative, like borderline credit, debt-to-income approaching 50% or even higher, or you are left with no reserves, and they institute a reserve requirement, you could be stuck. The best thing to do is find a house as quickly as possible, because guidelines are constantly changing these days, with little notice.
0 votes Thank Flag Link Wed Mar 17, 2010
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