The All New Accelerated Buyer Mortgage Program
This BLOG On The Accelerated Buyer Mortgage Program Was Updated On May 5, 2017
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 and 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 and home buyers and real estate agents alike are loving this new loan progra. Like the saying, “Potato, Po-tah-to, Tomato, To-mah-to, Let’s call the whole thing CLOSED”
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 is one reason and one reason only why a borrower gets a last minute loan denial or 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.
- Borrowers depend on their loan officers and 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 a earnest money check, the ball is in motion and 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.
Some loan officers will just take a brief look at the borrowers 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 credit report may not render an approve/eligible per Automated Underwriting System Findings.
- Judgments and Tax Liens may be reported on credit report.
- Federal student loans may be in collections and delinquent.
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 and 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 that your closing happens more quickly and much more smoothly, which is always the goal.
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 borrower’s mortgage application, credit report, mortgage documents such as tax returns, W2s, bank statements, and runs the file through the Automated Underwriting System for an automated loan approval.
- 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 mortgage 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 and the only condition that need 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, its 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 initial review. Using the Accelerated Buyer program allows a mortgage professional to front-load the process so that we can review all of your 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 home buyers 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.