Can You Get Pre-Approved In One Hour On A Home Mortgage

This ARTICLE Is About Can You Get Pre-Approved In One Hour On A Home Mortgage

The qualification and pre-approval step of the mortgage process is the most important step.

  • One of the major reasons for stress during the mortgage process or a last-minute mortgage denial is due to the loan officer issuing a pre-approval letter prior to properly qualifying the borrower
  • Loan officers should not be issuing a pre-approval letter without properly qualifying borrowers
  • The loan officer needs to take the mortgage loan application (1003), run a tri-merger credit report, collect mortgage documents, and run the borrower through the automated underwriting system (AUS) during the mortgage qualification step
  • The loan officer should thoroughly review the borrower’s tri-merger credit report
  • One of the biggest mistakes loan officers make is not looking out for outstanding credit disputes
  • Credit disputes are not allowed during the mortgage process unless the credit dispute is exempt from retraction
  • Any pre-approval issued with outstanding credit disputes that are not exempt is null and void
  • We will discuss and cover credit disputes in later paragraphs
  • So, the answer to the question of Can You Get Pre-Approved In One Hour On A Home Mortgage is YES
  • However, the borrower’s cooperation is necessary
  • The bottom line is a pre-approval letter should never be rushed and issued without the loan officer properly qualifying the borrower

Can You Get Pre-Approved In One Hour On A Home Mortgage: Quality Versus Speed

Loan officers, homebuyers, home sellers, real estate agents should all realize the importance of a solid qualified pre-approval versus a pre-qualification letter.

  • One of the biggest reasons why there is stress during the mortgage process is that a loan officer issued a pre-approval letter without properly qualifying the borrowers
  • This is also one of the biggest reasons for a last-minute mortgage denial by mortgage underwriters
  • Pre-approval letters can be issued by loan officers in less than an hour
  • However, the loan officer needs to diligently thoroughly review every aspect of qualifying borrowers prior to issuing a pre-approval letter
  • It is better for a loan officer to carefully review the loan application, credit report, and AUS Findings and properly qualify the borrowers before even thinking about issuing a pre-approval letter
  • A pre-approval should never be issued without the loan officer running a tri-merger credit report

The tri-merger credit report needs to be carefully reviewed as to the accuracy of its content.

The Importance Of Reviewing The Tri-Merger Credit Report During The Mortgage Process

Lenders use the middle credit score of borrowers as the qualifying credit score.

  • However, just because a borrower has a high credit score does not mean everything is good with the loan applicant
  • One of the biggest mistakes loan officers make is not thoroughly review the borrower’s credit report
  • The need to carefully analyze and review the line item per line item
  • They need to check for credit disputes
  • Unless the credit dispute is an exempt credit dispute, all disputes need to be removed prior to and/or during the mortgage process
  • Any pre-approval letter issued with outstanding credit disputes is null and voided
  • Loan officers should thoroughly interview borrowers when reviewing the credit report
  • Not all credit items report on credit bureaus
  • Ask the borrower if they have any public records they have outstanding that are not reporting on the tri-merger credit report

All public records will get discovered when the lender does a national third-party records search.

Look For Accuracy On Credit Report

Credit report

The loan officer should carefully review the tri-merger credit report and discuss with the borrower the accuracy:

  • Loan officers should carefully interview the borrower and question them about any public records not showing up on the credit report
  • Public records such as bankruptcies, foreclosure, judgments, and tax liens sometimes do not report on credit reports
  • However, all public records will get discovered when lenders do a third-party national public records search
  • Loan officers need to go over line item per line item of the borrower’s credit reports and look over to see whether there are credit disputes
  • You cannot have credit disputes during the mortgage process unless they are non-exempt credit disputes
  • We will cover what needs to be reviewed and focused on when a loan officer issues a pre-approval letter

There is no reason why a borrower should not close a mortgage loan if they were properly qualified and pre-approved by a loan officer. The mortgage loan should not just close, but should close on time.

Can You Get Pre-Approved In One Hour On A Home Mortgage: How Soon Can I Start Shopping For A Home

The minute you have been issued a solid pre-approval letter, you can start shopping for a mortgage and enter into a home purchase real estate contract.

  • The very first step of your home buying journey is getting qualified and pre-approved for a mortgage
  • A mortgage pre-approval letter is when the loan officer has gone over your mortgage loan application (1003), run a tri-merger credit report, went over your gross income and all of your monthly debt, and verified your assets and made a determination, and sees you fully qualify for a mortgage loan
  • The loan officer ran your file to the automated underwriting system (AUS) and has a approve/eligible per automated underwriting system (AUS)
  • Borrowers do not need to be present to get qualified and pre-approved
  • It can be done over the phone or via the internet
  • There are no fees and/or costs involved in getting pre-approved

In the event, if you do not currently qualify for a mortgage, your loan officer will work closely with you in getting you qualified.

Reasons Why Borrowers Cannot Qualify For A Mortgage Today But Can In A Few Months

Borrowers Cannot Qualify For A Mortgage Today But Can In A Few Months

The top reasons for borrowers not qualifying for a loan today but will in several months are the following:

  • They do not have the minimum credit score requirements
  • For example, to qualify for a 3.5% down payment home purchase FHA loan, you need a 580 credit score
  • You need a 620 credit score to qualify for a conventional loan 
  • You normally need 12 months of timely payments in the past 12 months to get approve/eligible per the automated underwriting system
  • Gustan Cho Associates has some quick tricks of the trade on helping borrowers boost their credit scores
  • There is nothing anyone can do with late payments in the past 12 months

Lenders and the AUS want to see timely payments in the past 12 months to approve a mortgage borrower. It is okay to have outstanding collections and/or charged-off accounts but lenders want to see timely payments in the past 12 months.

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