Getting Pre-Approved For Mortgage
Every mortgage company has their own ways of pre-approving a mortgage loan applicant. Some mortgage companies are more lax in having a borrower getting pre-approved. Other mortgage companies will take them a few days of getting pre-approved because they go through an extensive pre-approval process. Some mortgage loan applicants cannot wait two to five days for a pre-approval letter and will go to another lender if one lender tells them that they need to provide documents first before pre-approving them.
Getting pre-approved starts when the mortgage loan applicant completes our online mortgage loan application by clicking APPLY NOW which is a 4 page mortgage application. Once the mortgage loan applicant completes the 4 page online mortgage loan application, I will get alerted via email that someone has completed a 1003. I then contact the mortgage loan applicant and go over the mortgage application and run credit. After running credit, I submit the mortgage loan package through Fannie Mae’s or Freddie Mac’s Automated Underwriting System for an automated approval. Since I am a mortgage banker with no Lender Overlays , I just go off the Automated Findings and if I get an approve/eligible per automated findings, that is the full approval and we normally bat 100% in getting a clear to close as long as the mortgage borrower can provide the conditions on the DU FINDINGS or LP FINDINGS.
Getting Pre-Approved By Loan Officer
Prior to getting pre-approved for home loan, your loan officer will ask you a series of questions. Your loan officer will want to know how much seasoned assets you have and whether you have enough down payment for the home purchase. If you do not have enough down payment, your loan officer will ask you whether you can get a gift for the down payment shortage or the full down payment from a family member. Your loan officer will also calculate the closing costs required for your home purchase Closing costs are fees and costs that is associated with the purchase costs and origination costs and fees of your home loan. Here are examples of your potential closing costs:
• A fee or costs to run your credit report
• A loan origination fee or underwriting fee that the lender charges
• Title search fees and costs that is charged by the title company as well as recording fees charged by the city, county, and state
• Title insurance fees and costs
• Appraisal fees and costs
• Inspection fees and costs
• Attorney fees and costs
• City and state transfer tax fees and costs
Most home buyers do not have to worry about closing costs because you can get a sellers concessions for a home buyer’s closing costs or have the mortgage lender cover closing costs through a lender credit in lieu of a slightly higher mortgage rate.
Getting Pre-Approved For Home Loan For Self Employed Borrowers
Getting pre-approved for home loan for self employed mortgage loan borrowers may take extra time because the loan officer will need to review full tax returns of the mortgage loan borrower. Self employed borrowers normally deduct a lot of expenses on their tax returns and a loan officer who is experienced with reading and analyzing tax returns will need to fully analyze the net true income mortgage loan underwriters will go by. Those mortgage loan borrowers with unreimbursed expenses will need to have those expenses deducted from their gross income.
Overtime Income, Part Time Income, Bonus Income
Mortgage loan borrowers with overtime income, part time income, and bonus income will need some extra time in getting pre-approved if they need to include these incomes due to higher debt to income ratios. A verification of employment will need to be done for mortgage loan applicant’s who are counting on overtime income, part time income, and bonus income to be included in order to meet debt to income ratio caps.