This Article Is About Accelerated Buyer Mortgage Program Pre-Approvals
The Accelerated Buyer Mortgage Program is a special mortgage loan program where a home buyer can get a mortgage loan approval by a mortgage underwriter:
- The only thing that is missing is the property
- Sounds too good to be true?
- Well, the fact of the matter is that it is true
- Homebuyers and real estate agents alike are loving this new loan program
- Like the saying, “Potato, Po-tah-to, Tomato, To-mah-to, Let’s call the whole thing CLOSED”
In this article, we will discuss and cover the various loan programs offered by Gustan Cho Associates.
Advantage Of The Accelerated Buyer Mortgage Program Versus Standard Pre-Approval
Over 75% of our borrowers are folks who either have gotten notice of a mortgage loan denial or are going through a stressful mortgage process with a lender. There are one reason and one reason only why a borrower gets a last-minute loan denial. Goes through a stressful loan process and requests closing date extensions from the sellers’ side. It is because they were not properly qualified by their loan officer. The loan officer either did thoroughly review the borrower’s credit/income profile, or did not know their lender overlays prior to issuing a pre-approval letter.
Importance Of Properly Qualifying Borrowers
Borrowers depend on their loan officers. Borrowers count on them to make sure that once they are given a pre-approval letter that they can go and shop for a home of their choice and can enter into a real estate purchase contract. Once a home buyer enters into a purchase contract and gives an earnest money check, the ball is in motion. The home mortgage process is in full swing. Unfortunately, not all pre-approval letters are created equally, and to this day. It amazes me that some loan officers will issue a pre-approval letter to borrowers without even thoroughly reviewing the borrower’s credit report.
How Loan Officers Qualify Borrowers And Issue Pre-Approval Letters
Some loan officers will just take a brief look at the borrower’s middle credit score and see that they meet the minimum credit score requirement and do not realize the following:
- Borrowers can have credit disputes on non-medical collections and charge off accounts
- Borrowers can have public records on their credit report that is misreporting with inaccurate dates
- Recent late payments on the credit report may not render an approve/eligible per Automated Underwriting System Findings
- Judgments and Tax Liens may be reported on the credit report
- Federal student loans may be in collections and delinquent
Issuing Pre-Approval Without Properly Qualifying Borrowers
A sloppy pre-approval will not just affect the life and fate of the borrower but will affect everyone in the real estate transaction such as the sellers, realtors, attorneys, and more importantly, the families of the buyers and sellers. Even if the loan officer does his or her best, mistakes can happen. Things can pop up during the mortgage process that can delay and/or cause stress for borrowers and the mortgage team.
Commitment To Lend With The Accelerated Buyers Mortgage Program
The mortgage industry is ever-evolving these days, and the terminology can be confusing. Many realtors, and thus both buyers and sellers alike, think that a Pre-Approval is the same as a Commitment to Lend. That is not the case, this is not just a variance in pronunciation. Knowing the integral difference and applying this insight could mean the closing happens more quickly and much more smoothly, which is always the goal.
Commitment To Lend
The “Accelerated Buyer” mortgage program. This program is the equivalent of a Commitment to Lend. The best analogy I can give our viewers is to do a comparison of our Accelerated Buyer mortgage program to a mortgage pre-approval. A mortgage pre-approval is issued by a loan officer after the loan officer reviews the following:
- mortgage application
- credit report
- mortgage documents such as tax returns, W2s
- bank statements
- runs the file through the Automated Underwriting System for an automated loan approval
Accelerated Buyer Mortgage Program Loan Process
With The Accelerated Buyer Mortgage Program, the borrower’s mortgage file will get assigned a mortgage processor. After the mortgage processor gathers and processes the file. The mortgage processor with submit the loan package to our underwriting team and a mortgage underwriter will be assigned to the file. The mortgage underwriter will underwrite the file and once it is underwritten will issue a conditional loan approval. The Accelerated Buyer Mortgage Program is like any other underwriting process. The only condition that needs to be fulfilled will be the subject property. Once the borrower gets a property, the numbers such as purchase price, property taxes, insurance will be adjusted. The appraisal and title needs to be ordered and the whole file will be submitted for a clear to close. The Accelerated Buyer mortgage program is a phenomenal loan program that is a major hit with realtors throughout the country. For realtors, it’s like having a cash home buyer.
Closing In Less Than 2 Weeks
The application is fully qualified with our Underwriting department BEFORE a property has been found. So, what does that mean to all parties involved? As a former realtor, I know that in a multiple offer situation. An offer with a true Commitment to Lend would be more competitive than an offer with just a Pre-approval. A Pre-qualification is even less desirable as there is a decreasing level of the initial review. Using the Accelerated Buyer program allows a mortgage professional to front-load the process so that we can review all documentation before an offer is placed. You will have more buying power as that has already been confirmed by the Underwriting Team. The leverage of a Commitment to Lend is crucial in today’s market. It will be even more important as we move into the Spring market. All you need to do is find a property, and your closing will go more smoothly and effortless and most homebuyers can close in two weeks or less. You can shop with confidence that you’re already approved. If you want to be an Accelerated Buyer and have a better chance of winning your bid in a limited inventory market, please feel free to contact me.
Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on government and conventional loans. Contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.
