Before starting the pre-approval process, a borrower should understand what an overlay is to avoid dealing with a lender with an internal guideline on top of VA, FHA, conventional, and USDA guidelines to prevent a last minute denial. The purchase process should always start with the pre-approval process by verifying assets, income, and credit. Loan Originators often have a different mortgage pre-approval process, which some are more meticulous than others. Just because a borrower has a mortgage pre-approval letter does not mean they qualify for a mortgage – the question that should be asked is, “How solid is my mortgage pre-approval letter?” A TBD property mortgage approval is an optional and additional step to obtaining a solid mortgage pre-approval letter, which credit, income, and assets are verified by a underwriter.
The TBD Property Mortgage Approval Process
The TBD property mortgage approval is a way to have a rock solid pre-approval where income, assets, and credit are reviewed by an underwriter rather than a Mortgage Loan Originator.
The process starts by a licensed Mortgage Loan Originator taking a complete application without a property.
On the application, the subject property will have TBD and the Loan Originator will ask for details just as if they were going to submit the loan with a property.
An experienced Mortgage Loan Originator will send a list of documents that are going to be required for submission.
Note that some Loan Originators do not have access to the Automated Underwriting System (AUS) and rely on other people in their company to run the program.
At Nationwide Mortgage & Realty, LLC our Mortgage Loan Originators have access and are able to run the Automated Approval System (AUS) the same day documents are received.
After a complete credit package, loan application, credit report, income, and assets have been gathered, the package is sent to an underwriter for review. Once reviewed by an underwriter, they will issue a mortgage commitment subject to a sales contract, appraisal on the property, and other property documentation.
Advantages Of TBD Property Mortgage Approval
A complete credit package, loan application, credit report, income, and assets are already verified by a underwriter.
The TBD mortgage pre-approval letter often gives negotiating power when putting an offer in on the house.
The TBD property mortgage approval takes a little longer than just going through the pre-approval process without an underwriter verifying documents. An experienced Mortgage Loan Originator usually will not dismiss a borrower that has been denied, but tell them what they need to work on in order to get pre-approved for a home.
After The Pre-Approval Process Is Complete – Issuing A Mortgage Pre-Approval Letter
Just because a mortgage pre-approval letter has been issued, does not mean that a borrower is guaranteed a loan.
A mortgage pre-approval letter should always be written based on a credit report, income, and assets that were provided.
There should be a set maximum mortgage payment, purchase price, loan amount (can vary depending on tax bill and home owners insurance), loan program, maximum loan-to-value, and term of the loan.
Even if a borrower qualifies, does not mean that a property will qualify.
The clear to close is obtained by clearing all borrower related and property related conditions.
Once the purchase contract is accepted, an acceptable appraisal, taxes and home owners association dues should already have been factored, a clear title, acceptable home owner’s insurance policy, and life of a loan flood certification should be furnished.
Nicholas Auriemma is a Loan Originator at Nationwide Mortgage & Realty, LLC, providing information on mortgages that can often be confusing even to real estate and mortgage professionals. Borrowers can be discouraged because mortgage professionals can be mistaken due to guidelines always changing, the extent of guidelines, their company having an overlay (a stricter guideline), or other lenders not offering a loan program. Call or text Nick anytime at 630-779-8430 or email at email@example.com.
All loans are subject to credit, underwriting and property approval guidelines. Offered loan products may vary by state. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. Terms, conditions and programs are subject to change without notice. Nationwide Mortgage & Realty, LLC is not acting on behalf of or at the direction of HUD/FHA or any government agency. CO: Check license status of your mortgage loan originator atwww.dora.state.co.us/real-estate/index.htm. Also licensed in: FL. VA, and TX: NMLS ID 276777. Illinois Residential Mortgage License | MB. 6760210. WA: Consumer Loan License MB-276777. GA: Georgia Residential Mortgage Licensee 60857