Why loaners only provide preapproval but not prequalification letters?

Question

I plan to start my search of houses this quarter and planned to get a prequalification letter first. With it I can have a better idea of the price range I can afford.

I contacted BOA and Chase loaners. And they all told me that they are only willing to provide preapproval letter, but not prequalification letter.

Can you help share some insights why bank loaners do not want to provide prequalification letters?

I do not want to get a preapproval letter now as I can not afford the credit score decrease if I can not find the right house in 90 days. My current credit score is around 750. If I do a hard pull but can not buy a house in 90 days, I am worried that I can not get the best interest rate after a 20-50 credit decrease.

Any suggestions how I can get a prequalification letter?

Thanks!

Paul De Luca · Answer

That's strange they're not willing to provide you with a pre-qualification letter since I've seen buyers get those without issue. But at the same time, why do you need a pre-qualification letter? Wouldn't it just be acceptable for them to tell you roughly what your affordability is?

Also, if you're planning on actively looking at houses in person you should have a pre approval letter (your agent will want that too). Typically pre approval letters are valid for 90 days or so. A hard credit inquiry should not decrease your credit score by 20-50 points but more like less than 10 (usually just a few points). You should ask the lenders to confirm that though.

Leo Sun · Answer

If it is usually less than 10, then I will feel comfortable to get a pre approval letter instead.

Thanks for the information!

Ramsin Jacob · Answer

How many lenders did you go to?  If you want, I can point some your way.  It is best to speak with multiple anyhow.  Let me tell you a secret people don't know:  When you go to 1 lender and they pull your credit, you will have a 30 day window to apply with as many lenders as you wish, with your credit not getting pulled again.

David Bilandzija · Answer

@Leo Sun While it is wise to be responsible about pulling credit, I certainly wouldn't overthink it. It your are ready to make offers get comfortable with having your credit pulled.

Emanuele Mayer · Answer

Hello Leo, my name is Emanuele and I’m a mortgage broker in the Bay Area.

I would be more then glad to help you get a pre-qualification letter, please call or text me at 415-706-1582 so we can discuss your goal and create a plan.

Why loaners only provide preapproval but not prequalification letters?

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