The LVR Podcast™ Episode #22

Written by on August 24, 2022

The LVR Podcast

How Beneficial Are Pre-Approvals In Changing Market Conditions?

Designed for Brokers, made by Brokers.

August 24th, 2022

This podcast is our chance to give back to the mortgage broking industry and talk about real issues that are affecting most brokers and loan writers right now. Learning, Validation and Respect = the very foundations of all relationships.




Pre-approvals are a hot topic as markets change, so today we’ve diving into pre-approvals, their benefits and at which point are they necessary or unnecessary.

Here’s the key take away points: 

  • Are pre-approvals worth doing in the current market where assessment rates and interest rates are changing?
  • We have got to start understanding the time we spend with the client and the time we work for the client.
  • If you get a client pre-approved through a particular lender and you know that another lender is coming out with a better offer in a few weeks, then you’re doubling your work.
  • Pre-approvals can be worthless in a lot of situations if the property price changes, or a client’s situation changes or so many other things so there are a lot of challenges.
  • For some clients it’s dicey for them to bid at auction if they don’t have a pre-approval.
  • Make a call on which clients can proceed with the application and have plenty of spare equity and deposit so that if something changes, they’ll be fine.
  • A mortgage broker needs to educate your clients that a pre-approval is not a guaranteed approval. You can help them to understand what it is, and what it really means.
  • If you’re not willing to do a pre-approval for a client you may lose that client, or your client might not feel comfortable going for auction properties without the pre-approval.
  • Understand a client’s ceiling of what they can borrow and educate them around the options available for them.
  • The lenders reserve the right to reassess applications after pre-approval or even formal approval.
  • A pre-approval is not as valuable as most clients feel that it is.
  • If we’re doing a pre-approval then why are we doing it, what is the value, and how do we maintain it to become an approval for the client? 

Key Quotes

“We need to tell the story a little better for the client. A pre-approval is just a piece of paper, but you tell the client the story and get them to talk to you as their advisor and connect with you.” – Ruan 

“Find your skill of engagement rather than your skill of securing pre-approvals” – Ruan 

“Making sure your clients understand what a pre-approval is, what it means and that it’s not a formal approval.” Marissa 

“How valuable is a pre-approval for most clients? Probably not as valuable as clients think. But is it important?” – Marissa




More From Marissa and her company, Rise High Financial Solutions:

Marissa Schulze Linkedin 

Marissa Schulze Instagram 

Marissa Schulze Facebook 

Rise High Financial Solutions

More From Ruan and his company, Success and Broker:

Ruan Burger Linkedin 

Ruan Burger Instagram 

Ruan Burger Facebook 

Success and Broker

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