Regardless of which type of loan you want to get, the reality is that getting one is a complex and tedious process: you have to find the best option for your needs, you have to compare companies or banks that offer you what you need to get the best deal and then you have to be approved for your loan, which usually involves several visits to the bank and a lot of paperwork. To exploit this annoyance, there are several websites or online companies that offer to “get you pre-approved” for a loan, credit card or mortgage, and they claim that this will save you a lot of time and troubles in the future. Well, as you are about to see, reality can be a little different from those claims:
Online pre-approvals are easy
The first thing that makes getting an online pre-approval so appealing is that they so easy to get and you are under impression that it is the right thing to do. Even more, that once you get pre-approved online, you feel that you are guaranteed to get that loan or mortgage you need. This plays mainly on two factors:
First, getting a pre-approval online certainly is way less work that going to the bank several times, so most people tend to think that even if they do not get pre-approved for a loan with a particular loan or company, they can always try with a different one and they will save some time and troubles.
And second, since online pre-approvals pretend or claim to be way faster than the traditional method, people feel like they can start making other important financial decisions as soon as they find out if they have been pre-approved, which makes them want to make the process as quick as possible.
What you should know is that true pre-approvals are not as easy, so the terms could change at an moment and if you have made important financial decisions based on what you were pre-approved for, you could be in for a lot of trouble.
Online pre-approvals are not as simple as companies put them
Naturally, all companies that offer online pre-approval services for a loan or mortgage want to make their service sound as simple as possible, and that usually ends up in you getting your hopes up higher than you should and sometimes getting disappointed –and having wasted money.
While most online pre-approval companies don’t go as far as to flat-out lie to you when offering you their services, they certainly can be a little intentionally misleading to convince you to hire their services immediately. For example, for a mortgage, some companies fail to mention that an appraisal of your home is not the only thing you require to get approved, and instead they focus a lot of their efforts and attention to make it look like the appraisal is the most important part of the process –thus somewhat implying that it is the only one.
It is not uncommon for people who know exactly how much their home is worth to assume that the appraisal will be more than enough to get them pre-approved for a mortgage, and then end up getting rejected for other reasons, and believe us there are lots of reason getting denied.
Loan officers don’t have the authority to approve your loan, whether you are pre-approved or not
Probably one of the most important things you should know about online pre-approvals are issued by the system. Not a single person reviews them. But even if loan officer reviews your paperwork and pre approves you, you should know that this person is not a final decision maker.
Loan officers work at companies who offer pre-approval services and their job is only to request your relevant documents, gather them together in the proper way and then submitting them to the underwriters who are in charge of approving a loan or not.
Getting pre-approved only means that your documents are complete, up to date and they fill every requirement to ask for a loan, not that you have increased chances of actually getting the loan. And, conveniently, this is something that most online pre-approval companies forget to mention. In case you are not eligible for a loan, you will get rejected even if you were previously pre-approved and, obviously, you won’t get your money back.
Some companies are there for a short run
All the points we made before are assuming you are dealing with a serious and legit pre-approval company. You should keep in mind that there are some businesses that are far from ethical standards and don’t care about marketing regulations to what they promise and they sometimes don’t even bother to send your documents. They just charge you, tell you that you’ve been pre-approved and then forget about you and stop replying. While there aren’t many companies like this since they usually get shut down very quickly, you should still be careful.
Of course, if you are thinking about buying a house in Florida, you want to know if you actually can get a mortgage. That’s why, we recommend you to talk to a reliable mortgage banker who will take time and reviews all of your documents, asks questions and reveals all potential reasons on why you can get denied for a mortgage. If you are in Florida, you should talk to Julia Lysenko who has been trusted mortgage lender for many clients and 100% closing rate. If she preapproves you for a mortgage, you will be getting a mortgage, guaranteed!