There aren’t really any downsides to pre-approvals. However, clients should know what to do with a pre-approval. For example, a client shouldn’t assume that a pre-approval is a good reason to remove the “subject to financing” clause in a purchase offer. A pre-approval isn’t a final approval and doesn’t include a property appraisal. Note that a property appraisal is necessary for final financing approval.

Never remove a “subject to financing” clause in your offer unless your realtor has insight into why you should do so.

Unfortunately, not everyone can get pre-approved. Some of the most common reasons for being denied a pre-approval include:

• Bad credit
• High debt
• New job
• Low down payment

The good news is that being denied a pre-approval doesn’t mean you won’t get a mortgage. OneTrust Home Loans will be happy to work with you to review your options. We will look at why you were denied and see if the issue can be resolved quickly. For example, perhaps you have a low credit score, but there are negative items on your report that are inaccurate. These can be disputed and your score will rise.

Or, perhaps a non-conventional loan is a better approach. In that case, we will review your options and offer our recommendation.

Yes, OneTrust Home Loans will conduct a hard credit check to issue a pre-approval letter.

Getting a pre-approval letter from a lender doesn’t mean you ultimately have to apply for a mortgage with them. If you believe you can find a better mortgage rate elsewhere, it’s in your right to choose.

However, note that applying with too many lenders means there will be several hard credit checks on your credit report. Having several of these checks back-to-back can result in a drop in your score, which can impact your application.

Additionally, if you choose to go with a different lender, you’ll have to resubmit all documentation and reapply with the new lender. This can delay the process, so it may not be the best choice if you have a home already in mind.