Here’s the inside scoop: the old style of pre-approvals, which was at best a 5 minute phone call, a quick look at credit and maybe gathering a W-2 and a pay-stub…Is NOT enough!
Today, that quick and easy strategy (for the Loan Officer) is not enough and often results in a last minute decline by an Underwriter, lost money and not closing on your home. There are literally hundreds of new underwriting rules about length and type of income (bonus, OT, commission, shift differential, etc.), credit (scores, history, seasoning of bankruptcy, foreclosure, short-sales, etc.) And don’t get me started on source of funds for down payment. It’s RIDICULOUS!
The truth is, the underwriting process has become insanely anal, but griping about the current guidelines won’t do you or me any good. What we can do is PREPARE well in advance, review and analyze your income like an Underwriter will, and work through potential challenges early in the process of finding a home.
If you want an UNEVENTFUL loan and closing on your new home, we suggest clients complete a full Credit and Income Approval. This is where we gather and review all documents as well as run Automated Underwriting for FHA, Conventional, USDA or VA loans. When our team is done with your Credit and Income Approval, it’s like a blank check. You find a home and we’ve got the cash ready for you.
Here are the steps to the Credit and Income Approval process:
- Complete a quick online or verbal application.
- We will request a list of documents from you that are specific to your situation and decided loan program.
- We then verify employment, credit, income, child support, alimony, credit related documents, source of down payment funds (the list goes on and on).
- We underwrite and issue a written Credit and Income Approval (blank check).
Is this more work for you? Not really, you are going to be asked to supply all these documents eventually and once we have them we won’t ask you for them again. And trust me, gathering these items before you’ve boxed up the house is a lot easier than the last minute panic search for your Social Security card.
How long does this all take? Well, that really depends on your history. If you have had multiple jobs, marriages, or credit blemishes, the process can take up to a week to gather and review everything. If you are in need of a quick pre-approval letter so you can make an offer, we will try to accommodate you, but we suggest you keep moving forward towards the full Credit and Income Approval.
Like most things in life, a little extra effort in the beginning leads to a more desirable outcome in the end and that is why we recommend the full Credit and Income Approval process.
It would be our pleasure to answer any questions and help you into your new home!
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