You know, one of the biggest things that we see is we’ll receive a phone call from a customer who’s upset. They’re in tears because they thought they were pre-approved by a home. They find a home of their choice, going under contract only to be told by underwriting that their loan is not approved.
What happened? Well, what happened was they were pre-qualified versus being pre-approved.
What’s the difference? Well, pre-qualification consists of an individual calling your mortgage lender, giving the information to pull credit, and then they tell their lender how much they make over the phone, $20 an hour, 40 hours a week, $800 a week. Now we, as a lender, calculate the numbers based on their liabilities, and we tell them, okay, based on the information that I’m looking at right now, I think we can pre-qualify you for this amount of money.
It’s just a pre-qualification.
A pre-approval consists of the same initial first steps you call your lender. You give your information. They pull your credit. Now we send you an application needs list, which consists of the most recent pay stubs for 30 days. Most recent bank statements for the past 60 days, W2, and tax return for the last two years. It could be one year, but one of your minimum two years maximum.
Now, once we have all of that information, we take your loan file, and we use a universal underwriting system called Desktop Underwriter, and we put everything in the system and it then determines how much you can be pre-approved to borrow. The next step we do is take a letter, and we have in the letter that this customer has submitted pay stubs, they’ve submitted bank statements and W2s, and they’ve been run through desktop underwriting and here’s their pre-approved amount.
Now, what does that do for an agent Well, most agents won’t even accept an offer unless it’s a true pre-approval versus a pre-qualification, because they know pre-qualifications does not always mean you’re going to close, whereas a pre-approval as long as you keep your job and everything stays as, as it was on the initial loan application, that you’ll be getting keys within 30 days. Now, what does that do for you Well, that gives you peace of mind knowing that, okay, now we found our home, and now we go through underwriting for the final approval and we’re going to get keys. And with the, for the agents, it also gives them peace of mind knowing that this house will close and it won’t have to go back on
The market. So it’s a win-win for everyone involved. the stress level is very minimum, so it’s good always to make sure that you’re pre-approved and not pre-qualified when buying a home. This is RR your mortgage guy.
This is Rodney Reynolds, your mortgage guy. If you have any other questions, my contact information is listed below. So please reach out to me. I’m available for any questions you may have. Have a great day.
Direct Line: 440-882-5403 | Fax: 440-398-8173
NLMS # 190606 LO# 036126.000 MB# 803389.000
Looking to get pre-approved to build or buy a house? Contact us today at (440) 628-1321
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