This BLOG On TBD Property Underwriting Mortgage Loan Approvals Was UPDATED And PUBLISHED On March 5th, 2020
TBD Property Underwriting Explained:
- Most mortgage companies will not start processing and underwriting a mortgage loan until a borrower has an executed real estate purchase contract
In this article, we will discuss and cover TBD Property Underwriting Mortgage Loan Approvals.
How Does Mortgage Process Work
Here is how a traditional home loan process works:
- Home Buyer contacts mortgage loan originator to get qualified
- Loan Officer will take a mortgage loan application, commonly known as 1003
- Loan Officer then reviews 1003
- Runs credit on borrower and/or borrowers which includes non-occupant co-borrower
Depending on the loan officer, a loan officer can issue a pre-approval then or proceeds to the next step.
Documents Required To Start The Mortgage Process
The next step is to collect mortgage documents to process mortgage loan like the following:
- 2 years of tax returns
- 2 years W2
- 60 days bank statements
- 30 days paycheck stubs
- Other documents
Loan Officer then runs the file through the Automated Underwriting System for an Automated Approval:
- If the loan officer gets an automated approval, the loan officer can issue a pre-qualification letter
A pre-approval letter should not be issued by a loan officer. At Gustan Cho Associates Mortgage Group all pre-approvals are issued and signed off by our mortgage underwriters. All pre-approvals are full credit approvals which is also referred as TBD Property Underwriting On Mortgage Loans
TBD Property Underwriting Pre-Approvals Versus Pre-Approvals Issued By Loan Officers
Over 75% of our borrowers at Gustan Cho Associates are the following types of borrowers:
- Borrowers who get a last-minute loan denial by other lenders
- Borrowers who are getting the run around by their current lenders
- Or are stressing over their current mortgage process where they are about to give up
There is no reason why a mortgage borrower should get a mortgage loan denial or stress during the loan process with any lender if borrowers have a solid pre-approval letter and the file is fully underwritten by a mortgage underwriter:
- The sole reason for last-minute mortgage denials and/or stress during the loan process is because the borrower was not properly qualified
- The pre-approval process is the most important phase of the overall mortgage process
- Loan Officer should not issue pre-approvals
- All pre-approvals should be issued by mortgage underwriters like it is at Gustan Cho Associates
The reason we have a 100% track record of closing on all of our pre-approvals is that all of our pre-approvals are signed off by our mortgage underwriters.
TBD Property Underwriting Mortgage Process
We now can process TBD Property Underwriting mortgage loan applications. All TBD Property Underwriting approvals are full credit approvals underwritten and signed off by our mortgage underwriters.
- Once borrowers files are TBD Property Underwritten, they get a conditional mortgage approval
- With a conditional mortgage loan approval, the only condition missing is the real estate purchase contract
- With a TBD Property Underwriting conditional loan approval, buyers can shop for a home and enter into a real estate purchase contract
Once the home buyer has an executed real estate purchase contract, the property is then underwritten and a clear to close is issued.
TBD Versus Traditional Mortgage Underwriting
Traditionally, lenders require that the mortgage loan borrower enter into a real estate purchase contract:
- The mortgage process then starts
- The file gets into processing and underwriting
- Without a signed real estate purchase contract, the mortgage approval process does not begin
- However, with TBD Property Underwriting, borrowers can get their mortgage loan application processed and underwritten as a TBD Property Underwriting and get a conditional loan approval
This means that the borrower is fully credit approved and the only condition missing is the real estate purchase contract.
Benefits Of TBD Property Underwriting
One of the major benefits of submitting a mortgage loan application as a TBD Property Underwriting versus the traditional way of underwriting a home loan is that borrowers have a sense of security. This is because mortgage borrowers know that the mortgage loan application has been fully processed, underwritten, and approved. The only condition left is to enter into a real estate purchase contract.
- The traditional way, where home buyers enter into a real estate purchase contract
- The mortgage loan application then is submitted for processing and underwriting
- Poses a possible risk of a mortgage loan denial or stress during the mortgage process
- TBD Property as a subject property mortgage approvals is best suited for those homebuyers with marginal credit
- Or borrowers who borderline approval
- Although borrowers get an approved eligible per DU Findings, there is always a possibility of a mortgage loan denial with many other lenders due to overlays
- For borrowers who have limited assets, high debt to income ratios, limited credit tradelines, late payments after a bankruptcy and/or foreclosure, recent overdrafts, no rental verification, open collection, or other derogatory issues, TBD Property as a subject property is the best way to go
Gustan Cho Associates is a five-star national mortgage lender with NO OVERLAYS on government and conventional loans. All of our pre-approvals are TBD Property Underwriting Full Credit Approvals. We close on all of our pre-approvals. Home Buyers who need a five-star national direct lender with no mortgage lender overlays, please contact us at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org. We are available 7 days a week, evenings, weekends, and holidays.