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Pre-Approval Process

A lot of people have asked me why do they have to get a pre-approval with me when they can get one online?

I'd call that online pre-approval letter "toilet paper". Why? Because they don't really verify anything. You just plug in the income you think you make, and they soft pull your credit and send you a YAY YOU ARE PREAPPROVED. That income you plug in might not be the method that an underwriter will use to qualify you and at the end your loan might get denied and it's a total waste of time.

Why do you need a real pre-approval?

Seller perspective

They want to know if the pre-approval has been verified. They call a loan officer that listed on the pre-approval. Sellers ask me if I review the down payment, closing cost, tax returns, credit history. Sometimes they even asked for the debt-to-income ratio and DU findings. Timelines on appraisal, commitment letter, clear to close. Also, they see if they like your lender and want to work with them.  All these prior to them making the decision to accept your offer.

Bank perspective

Will this client pay them back? How likely is it? Can we give this client any grants? What kind of loan program would be best based off the client's need?

Your perspective

You should use this opportunity to discuss with a trusted lender about how much you want to spend vs how much the lender can give you. Both down payment and monthly payment.  What kind of monthly payment are you talking about? Is there a pre-payment penalty if you want to sell or rent out the property before you payoff your mortgage. How much cash do you need to bring to close? Is there a free money around in your area to help you save more money? What's the program you should use? Especially when other bank say no you should get a second opinion from another lender. Lastly you should know how likely it is that your loan will go through smoothly, the lender should explain to you the debt to income and how they calculate your income to qualify.

If you don’t want to waste time with unverified pre-approval that doesn't really tell you anything, contact me today for your real pre-approval.

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. CrossCountry Mortgage, LLC (“CrossCountry”) does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by CrossCountry.