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11-26-2012 05:55 AM
We have submitted both type's of offer letter's when trying to buy a home. I am wondering how you feel about each and which is better.
Detailed would be the one that matches an exact price offer.
Vague would be one where the lender states that you are approved but does not name an offer price.
11-26-2012 06:09 AM
A vague letter is nearly worthless to a listing agent. The best thing to do is to have the letter match the offer price and to make sure that the loan officer is local and responsive to the inevitable call that he or she will get from the listing agent.
In some areas listing agents also ask buyers to fill out a financial information sheet but no everyone does this as it does feel like an unnecessary invasion of privacy.
11-26-2012 10:33 AM
I am not sure what details one needs besides the fact that you are qualified for a mortgage to purchase a home up to $X in value, and that you have verified funds for a downpayment to support such a purchase.
If you come in under $X or at $X, then the letter is valid and useful
11-26-2012 10:36 AM
The key here is the $X dollars. The original post said not naming a price at all. That would not be looked at favorably and would be considered worthless.
Other details which help are for the loan officer to refference "excellent credit" or "FICO scores over 700/720/740" whatever the case may be. Also having the loan officer mention that income and asset documents have already been reviewed would help but is not a must.
11-28-2012 11:39 AM - edited 11-28-2012 11:41 AM
Our preapproval letter said we could buy a home of $X with 20% down. The credit union that did the letter provided the letter to us as a Word document, and said that we had permission to change the $X up to the actual amount of our preapproval $Y, without the need to contact the credit union to tell them we were making the change. (We didn't actually use this credit union for the loan, but they offered an online preapproval with quick response [they asked for a list of income and assets, and they did pull credit scores---so it was a preapproval and not just a prequalification].)
11-28-2012 11:48 AM - edited 11-28-2012 11:51 AM
We can talk about this detail or that all day. However, in the end what matters overwhelmingly the most to LA's is the identity of the lending institution. A local, reputable lending source is what sets offers apart during the initial round, not the deal details. Getting approved with the minority DC-area lenders who are currently known for voluminous loan closings is the way to go. Redfin's Open Book list is a good start. Don't waste your time with WF, BOA or CHASE.
12-02-2012 03:54 PM
I couldn't agree more. Went with BOA and the delays did test my patience, they could barely make the closing date. Go with local lender or CU and pay the required fees. BOA just doesn't have the staff to meet needs promptly and things keep getting delayed. I although, I got a pretty awesome deal few weeks ago. 3.30% month ago with a credit of $300. No fees, origination of ANY kind. I doubt you could get that with local lender. So, if you have a flexibly closing date and care about extra $1-2k at the risk of missing closing date, bigger banks might be the way to go.
12-02-2012 04:14 PM
Usually the local lenders have the best rates. I had a client close two weeks ago who got 3.125% with total lender fees of less than $250 beceause they had a $781 credit and the fees were somewhere around $1000 or so prior to the credit. In my experience local lenders tend to be about .5% lower on total fees + points at the same rate or about .125% lower on rate than the big banks.
Credit unions have some nice niche products like one that had a 10 year arm which beat everyone in the market or PenFed who have a very interesting 5/5 ARM product where they also offer big closing cost credits but are often at or a bit above market in terms of rates and fees for stadard fixed rate products.