Preapproval letter

[Susan Herschell]

Hi BP community!

I am just starting out in investing in MF rental properties. I am working with a mortgage broker I have worked with for several years in buying two primary residences. I know and trust him and he is VERY responsive and quick to get closings done, etc... I am now working with him on securing a conventional loan for investment properties and his process may be slowing down the process. 

His approach for the pre-approval is to customize each letter unique to the property we are making an offer on rather than one generic letter that pre-approves us up to a specified amount. Although I agree with his strategy that personalizing each offer to the property your are making an offer on will help make in stand out, It can be very time consuming to contact him each time you want to make an offer (and we hope to be making many) to draft up a pre-approval. This also eats into precious time when having to react quickly to a listing, although he insists that he can turn it around quickly. But what if we're needing to make an offer on a weekend or when he is out of the office? 

Anyone else use this same strategy. Is this typical in the mortgage industry? Any pros on cons in doing it this way?  

[Julie L.]

@Susan Herschell Chris is correct that this is not only dangerous for the lender but also could result in a waste of time and damage your credibility as a buyer in the eyes of the listing broker. And if you are planning on making a lot of offers that is the last thing you want. My commercial broker that I work with knows what lender requirements generally look like so he usually only sends properties that make sense for me based on my specific lending criteria. And my lender and I have discussed at length what my parameters are in terms of DTI with respect to where the property income needs to be in order for me to qualify. As Chris said, this will generally only be provided to investors where the lender knows and trusts the investor to evaluate his/her qualifications.