Mortgage Pre-Approval Issued By Mortgage Underwriters

This BLOG On Mortgage Pre-Approval Issued By Mortgage Underwriters Was UPDATED On November 14th, 2017

Over 75% of our borrowers at The Gustan Cho Team at USA Mortgage are folks who either got a last minute mortgage loan denial or are stressing during their mortgage process with their current lender.

  • The main reason for a last minute mortgage loan denial or stress during the mortgage process is because the borrower was not properly qualified.
  • Many loan officers issue mortgage pre-approval letters without fully qualifying mortgage borrowers.
  • Just because a borrower meets the minimum credit score requirements and meets the debt to income ratio requirements does not mean they automatically qualify for a mortgage loan. 

Why Does The Gustan Cho Team Close 100% Of Mortgage Pre-Approvals?

As mentioned earlier, over 75% of The Gustan Cho Team at USA Mortgage borrowers are mortgage borrowers who either gotten a last minute loan denial or are stressing during their loan process by another lender due to improperly being qualified and being issued a pre-approval letter by their loan officer.

  • The mortgage pre-approval is the most important phase of the loan process.
  • All of our pre-approvals are full credit approvals by our mortgage underwriters.
  • All of our mortgage pre-approval letters are signed off by one of our mortgage underwriters.
  • Our underwriters will not just review the borrowers income and credit scores.
  • Our underwriters will thoroughly go over mortgage documents like tax returns, W2s, paycheck stubs, 60 days bank statements and other documents prior to issuing and signing off on any mortgage pre-approvals.

TBD Property Underwrite

All of our pre-approvals are issued via TBD Property Underwrite and our underwriters will fully underwrite the mortgage file.

Most mortgage loan officers are issuing mortgage pre-approval instead of underwriters and that can be a risky move.

  • A pre-qualification is just a question and answer session between the mortgage loan borrower
  • The licensed mortgage loan originator can issue a pre-qualification letter
  • A pre-qualification is when the mortgage loan originator reviews the following:
    • Completed 1003 mortgage loan application
    • Verifies the gross monthly income of the borrower or borrowers
    • Runs a credit check
    • Runs the file to Fannie Mae’s Automated Underwriting System
  • We strongly recommend that mortgage borrowers undergo mortgage pre-approval signed off by a mortgage underwriter versus a loan officer prior to signing a real estate purchase contract
  • This way, the borrower gets a full credit mortgage loan approval and the only condition left is the property
  • Most seasoned real estate agents will require a mortgage pre-approval prior to showing homes

Advantages Of A Mortgage Pre-Approval Issue By Underwriters Versus Loan Officers

A solid  mortgage pre-approval underwritten as a TBD Property Underwrite by a mortgage underwriter will be advantageous to home buyers because they know that they have a full credit approval on hand.

A mortgage pre-approval letter that is fully underwritten by a mortgage will be advantageous to borrowers in many ways.

  • Mortgage pre-approval underwritten by a mortgage underwriter is a full credit approval
  • It will show what mortgage amount the borrowers and co-borrower will qualify
  • It will show what the maximum allowable housing expense will be which includes principal, interest, insurance, mortgage insurance premium, and property taxes
  • Mortgage Borrowers who have a solid pre-approval letter backed by the approve/eligibile per DU Findings and fully underwritten by a mortgage underwriter will close their home loan
  • It will show the seller’s team that borrower is a strong qualified buyer and mean business

How Do I Get Pre-Approved By An Underwriter

Home buyers who are interested in getting a full credit mortgage loan approval with a direct lender with no lender overlays on government and conventional loans can call The Gustan Cho Team at USA Mortgage at 262-716-8151 or email us at gcho@usa-mortgage.com or visit us at Gustan Cho Associates at  www.gustancho.com and click the APPLY NOW icon on the top right of my website.

  • It is a 4 page 1003 mortgage application
  • Once submitting online application, we will get alerted and go over the application 
  • A mortgage tri-merger credit report will be run and the mortgage process starts
  • It will get submitted to Fannie Mae’s Automated Underwriting System for an automated approval
  • Once we get the approve/eligible, the loan process can then proceed and mortgage documents will be collected
  • The file will get assigned to a loan officer assistant and get prepped up for processing
  • A mortgage processor will get assigned
  • Mortgage processor will then get the file ready for the underwriter to underwrite the file
  • If borrower meets all the guidelines, the mortgage underwriter will issue a conditional loan approval which is our mortgage pre-approval
  • Mortgage Borrowers can go shopping for a home once they get a mortgage pre-approval issued by a mortgage underwriter 
  • Once the borrower gets an executed real estate purchase contract, the property will be underwritten and a clear to close will be issued

Mortgage Documents Required

For hourly and salaried employees:

  • Last 2 years  W2s from employer, or employers and personal tax returns.
  • 2 most recent or 30 days pay check stubs.
  • 2 most recent checing and saving account Bank Statements, 401(K), Liquid Assets, Investment Accounts and all other asset accounts

Income and asset information for self employed mortgage loan borrowers:

  • Last 2 years personal and business tax returens.
  • Personal financial statement
  • Year to date profit and loss statements.

Letters of explanations are required if the following apply to you:

  • Gaps in employment, unemployment, or underemployment or a change to a different line of work or profession.
  • If you had derogatory information such as bankruptcy, deed in lieu of foreclosure, foreclosure, short sale, judgments, tax liens, collections, charge offs, or late payments on your credit report. 
  • Overdrafts in the past year are really frowned upon by mortgage lenders but one or two overdrafts are allowed as long as it is accompanied by a good letter of explanations.

Other Applicable Documents That May Be Required If It Applies To You As A Mortgage Loan Borrower

  • Bankruptcy Discharge paperwork, all pages.
  • Child Support Documentation paperwork.
  • Lease Agreements and contracts in the event you own rental properties.
  • Verification of Mortgage in the event you own other residential or commercial properties.
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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