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To: Ilaine who wrote (65)2/19/2001 11:10:05 PM
From: Shoot1st  Read Replies (1) of 6901
 
Pre-approval takes about 2 days. Usually this is a method of motivating towards commitment. It really has no value in a real deal. In the rare instance that several people want the same home, it might have a slight advantage. But even pre-approved buyers back out of deals.

The time of the lock in is reflected in the actual rate the broker will quote...the longer the lock in the higher the rate. So often a 30 lock in is offered since it does not effect the rate. To go over that will cost the broker a certain percentage of the commission.

Brokers earn commissions from points and the rate. On average 2 points are made on a conventional A paper mortgage. Sub-prime can be as high as 5 points.

Getting back tothe time when sellers required pre-approval. It is more likely that the agents wanted the pre-approval and acted as though the seller was the bad guy. By the time you gather all the paper work to do a pre-appoval, you are nearly finished with the entire affair. This makes life easier for the agent.

IF I were to do a mortgage today, I probably would go to a small bank that in competitive and historically has not sold its loans. Then I would shop the Net for a broker and require that any "good faith estimate" be guaranteed within $100. I used to be able to calculate the GFE to near perfection with the exception of commissions.....and this is what I am trying to say.....GFE should be near perfect. IF you get into a situation where a GFE is changed prior to closing, refuse to close. They will eat the imaginary difference.

Shootie
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