What Is A TBD Underwriting Process Pre-Approval Letter

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What Is A TBD Underwriting Process Pre-Approval Letter

This BLOG On What Is A TBD Underwriting Process Pre-Approval Letter Was Written By Michael Gracz of Gustan Co Associates

What Is A TBD Underwriting Process Explained:

One of the best services offered from Gustan Cho Associates Mortgage is our TBD underwriting process. I am sure everyone reading this has heard or experienced the nightmare of a closing gone bad. There are many times clients are unable to close on their home due to error by a loan officer. Or a loan officer telling the client what they want to hear, NOT the facts. The old fashion process of a loan pre-qualification letter from your loan officer does not work anymore. With the ever-changing guidelines and regulations in the mortgage industry, many loan officers DO NOT know all guidelines.

Loan officers will receive an application, pull credit, verify assets for down payment, and issue a pre-qualification letter. The problem with this practice is there is much more to a credit report than just your credit score. Such as collections, judgments, disputed accounts, charged off accounts, and in some cases bankruptcies. The loan officer wants every deal to close, so they are trigger happy issuing pre-qualification letters. The reason we do not do this at Loan Cabin is clear.

A pre-qualification letter is not worth the paper it is printed on. At the end of the day, the loan documentation must be signed off by a certified underwriter, so we do that upfront. We know that when a deal blows up before closing or in some cases at the closing, NOBODY is happy. The realtors are very upset, the seller is in a horrible situation, and you are not buying your new home.

That being said, wouldn’t you like the peace of mind knowing that your loan pre-approval is a true commitment to lend? We do this to ensure you don’t lose any earnest money put down on the home! You don’t want to pay for an inspection and appraisal just to get your loan denied once it gets to an underwriter. We have also found our real estate partners are much more willing to work with you and be aggressive because they know that the deal will close! Once you have that pre-approval you know the exact payment amount you qualify for, so its happy house hunting for you and your family!

Who Can Use TBD Underwriting Process?

Any home buyer who wants a solid iron clad pre-approval that has been fully underwritten and signed off by our mortgage underwriters. This process is designed for tricky files or for borrowers who been turned down by another lender! Many of our clients have been dealing with lenders who have lender overlays are were turned down. The TBD process can save the day! With a TBD Underwriting Pre-Approval, buyers can rest assured there will be no stress and that they will not just close on their home loan but will close it on time.

What Is A TBD Underwriting Process And How Does The Process Work?

The process is very simple and similar to the old fashion method. After your initial consultation with your licensed loan officer, you will fill out an application link. That will allow the loan officer to get your file started and verify your credit report.  While they are working on that you need to send the following information to get your underwriting process started:

  • Last 60 Days Bank Statements – to source down payment
  • Last 30 Days Paystubs
  • Last Two Years W2’S
  • Last Two Years Tax Returns
  • Driver’s License

Once the loan officer has these documents, they will send you three pages to print, sign, and return. Thos documents are:

  • SSA Release SSN Verification
  • Borrower’s Certification & Authorization
  • Loan Request Consumer Information Letter

Your loan officer will go over each document with you so you fully understand each step. Once these are returned with proper signatures, the file is ready to be moved to the underwriter. I am sure you are wondering how can we underwrite your file if you don’t have a house picked out? The answer is simple. We underwrite the file with an address TBD (to be determined). We will qualify you to a payment comfortable for you and your family, or we can tell you the maximum payment you will qualify for.

Below you can download an “Underwriting and Loan Approval Process” by FDIC.gov

Download PDF

Once you receive your pre-approval, you are ready to shop for a house. Please keep in mind that you are approved based on your current situation and debt to income ratio. So it is your responsibility to keep your financial situation stable while you shop for houses. The following are a few examples of how you kill your pre-approval:

    • Take out new debt – buying a car during this process is not a good idea
    • Lose your job
    • Spend your assets we used to approve you

In today’s competitive real estate market, most realtors will not even talk to you without being approved. Please contact Michael Gracz of Loan Cabin at 630-659-7644 to get your approval started and make your underwriting process smooth. Have confidence submitting your offer knowing your information has been signed off by our underwriting staff! Your realtor will love you when they see your pre-approval letter has an underwriters signature at the bottom! Remember this service is available to take the guessing and apprehension out of the home buying experience. This process is supposed to be fun, not stressful!

This BLOG On What Is A TBD Underwriting Process Was UPDATED On August 14th, 2018 by Michael Gracz, National Sales Manager of Loan Cabin Inc.

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2 Comments
  1. Anita Speck says

    With the TBD Underwriting Process what type of letter to you issue the borrower to show a realtor? A Pre-Approval letter or some other type of letter?

    1. Gustan Cho, NMLS 873293 says

      With a TBD Underwriting Approval, the mortgage underwriter issues a loan commitment which is signed by the underwriter. TBD Approvals are loan commitments that has been fully underwritten and signed off by mortgage underwriters. The only conditions that is missing is underwriting the property. Once you get the purchase contract, then the property gets underwritten and a home appraisal is orders. Once the appraisal comes back, we can then submit the whole file for a clear to close.

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