Fully Underwritten TBD Mortgage Approval As Pre-Approvals

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss getting a fully underwritten TBD mortgage approval as pre-approvals. Fully Underwritten TBD Mortgage Approval on home loans is geared towards borrowers who may and/or may not meet agency mortgage guidelines. In most cases, loan officers will issue pre-approval letters if they are sure borrowers will definitely get conditional loan approval. However, there are cases and instances where it may be a 50/50 chance. Instead of the loan officer issuing a pre-approval for a borrower, there are instances where the file may be a tough file. A fully underwritten TBD mortgage approval will go through the entire underwriting process by a mortgage underwriter without the subject property. It is the same as full loan approval. 

Mortgage Approval With a Fully Underwritten TBD Versus Pre-Approval Letter

There are instances where a fully underwritten TBD mortgage approval makes sense for borrowers with less than perfect credit.  Examples of such cases are in the following case scenarios. Manual underwriting with Late payments in the past 12 months. Manual underwriting in cases with late payments during the Chapter 13 Bankruptcy repayment period. Late payments after bankruptcy, foreclosure, deed in lieu of foreclosure, short-sale. When a loan officer cannot get an automated underwriting system (AUS) approval and needs to go manual underwriting, it is best to do a Fully Underwritten TBD Mortgage Approval. In this article, we will cover Fully Underwritten TBD Mortgage Approval.

Cases Where A Fully Underwritten TBD Mortgage Approval Is Recommended

Cases, when Fully Underwritten TBD Mortgage Approval is recommended, are when there are extraordinary circumstances on manual underwrites. Fully Underwritten TBD Mortgage Approval is when a borrower’s file has been fully processed and underwritten. It is conditional loan approval. The only condition needed will be underwriting the property.

Once the fully underwritten mortgage approval is issued, the borrower can go out and shop for a home and enter into a written real estate purchase contract. Not all pre-approvals need to be a Fully Underwritten TBD Mortgage Approval. Only files that barely meet mortgage guidelines. Examples of such files are recent late payments, late payments after a bankruptcy and/or foreclosure, or other extenuating circumstances. In this article, we will cover and discuss the TBD Mortgage Approval on home loans.

Qualifying For A Mortgage With Bad Credit
Qualifying For A Mortgage

Before entering into a real estate purchase contract, a home buyer needs to get pre-approved for a mortgage. There are cases where a loan officer cannot judge fully whether or not a borrower will get approved for a mortgage, especially for borrowers with bad credit, low credit scores, or borrowers that need a manual underwrite. Homebuyers should never enter into a real estate purchase contract without being fully qualified and pre-approved by a lender. The qualification process begins with a loan officer taking a mortgage loan application. The loan officer will pull credit and thoroughly review the borrower’s credit scores and credit report.

Advantages of Fully Underwritten TBD Mortgage Approval on Manual Underwrites

FHA and VA loans are the only two mortgage loan programs that allow manual underwriting. You will not know fully whether a file is approved or not on manual underwrites on manual underwrites until the mortgage underwriter has underwritten the file. This is why TBD mortgage pre-approvals are the best choice for a pre-approval on manual underwriting files.

Mortgage documents such as tax returns, W2s, paycheck stubs, 60 days of bank statements, and other pertinent documents will be requested and reviewed. Once the loan officer reviews all docs, the loan officer will run the file through the automated underwriting system (AUS). If the AUS gets an approve/eligible AUS Findings and the borrower can meet all conditions from the AUS, a pre-approval can be issued.

Manual Underwriting Guidelines For Bad Credit Borrowers

If the findings come back refer/eligible per AUS and the loan officer is not confident about a full approval by an underwriter, the loan officer may submit the file to a TBD Loan Approval by a mortgage underwriter. The mortgage underwriter has a lot of underwriter discretion on manual underwriting. There are cases where it is a tough call for a loan officer to judge a manual underwriting file. Therefore, it is best to get these files through a fully underwritten TBD mortgage approval versus just a pre-approval letter from the loan officer.

What Does A TBD Underwritten Mortgage Approval Mean
TBD Underwritten Mortgage Approval

A TBD Loan Approval means the file has been fully processed and a mortgage underwriter has underwritten the file. The mortgage underwriter has reviewed all docs, ordered the VOE, and issued conditional approval without a property. A hypothetical TBD subject property was used to underwrite the file.

Michelle McCue, the National Sales Manager of Gustan Cho Associates says the following about a Fully Underwritten TBD Loan Approval:

A TBD Loan Approval is an optional and additional step to obtaining a solid mortgage pre-approval letter, which credit, income, and assets are verified by an underwriter. This calls for a quicker process since credit and capacity are already determined based on a maximum mortgage payment. The TBD property mortgage approval is a way to have a rock-solid pre-approval where income, assets, and credit are reviewed by an underwriter rather than a Mortgage Loan Originator.

How Long Does The Fully Underwritten TBD Mortgage Process Take?

Mike Gracz further states:

The Fully Underwritten TBD Approval takes a little longer than just going through the pre-approval process without an underwriter verifying documents. An experienced Mortgage Loan Originator usually will not dismiss a borrower that has been denied, but tell them what they need to work on in order to get pre-approved for a home.

The TBD Property Mortgage Pre-Process Process

As Michael Gracz mentioned, a fully underwritten TBD mortgage approval takes longer than a pre-approval issued by a loan officer. This is because, with a Fully Underwritten TBD Approval, the loan is fully underwritten by a mortgage underwriter. After the loan officer reviews docs, the loan is processed by a mortgage processor. The file is then submitted to underwriting and a mortgage underwriter is assigned. The complete 1003 (Uniform Residential Loan Application) is reviewed and the file is submitted to the Automated Underwriting System (AUS). Once the loan is fully underwritten and approved by the mortgage underwriter, the underwriter will sign off on the conditional mortgage approval.

Qualifying For A Fully Underwritten TBD Mortgage Approval With a Lender With No Overlays

To start the fully underwritten TBD mortgage approval process with a mortgage broker licensed in 48 states with no overlays on government and conventional loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The Team at Gustan Cho Associates Mortgage Group is available 7 days a week, on evenings, weekends, and holidays. GCA Mortgage has zero mortgage overlays on FHA, VA, USDA, and conventional loans. We are mortgage brokers with over 170 wholesale mortgage lenders.