TBD Property Underwriting Mortgage Loan Approvals

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 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.