How to Know if You are Really Pre-approved

Filed under: Qualifying for a Mortgage Loan

pre approvedFor potential home buyers, getting pre-approved for a home loan is vital. A pre-approval letter conveys to the seller that you have completed all of the required steps and you have the ability to be a home owner.

So, how do you go about getting pre-approved?

If you have been “pre-approved” for a home loan, then you have gone through the following process with a bank or mortgage broker:

1. You have submitted an application with a lender

2. You gave your lender permission to pull your credit report

3. You have provided all requested supporting documentation

4. Your lender has thoroughly reviewed all of your documents, including your tax returns and all of your financial information

5. Your lender has determined that you meet all of the credit guidelines

6. You know what monies you need for closing costs and total mortgage payment through communication with your lender

7. Your lender has explained to you which programs you qualify for

8. Your lender has run automated underwriting on your overall scenario

In addition, your lender should ask you detailed questions focusing on your credit score, credit history, income assets, and monthly obligations. The reason behind this is that your lender is determining if you can qualify.

If you have any of the following conditions, there might also be a few red flags that need an explanation.

These include:

  • a foreclosure, short sale, or bankruptcy in the past seven years
  • a previous loan modification of any kind in the past seven years
  • high consumer debt payments, such as income-based student loans, car loans, credit cards, and/or alimony payments
  • gyrating income
  • 2106 un-reimbursed expenses on your tax returns
  • any and all self-employed income
  • investment property scenarios

It is a good idea to be patient with the lender, giving him or her the time needed to make sure your pre-approval is solid. Having all of your finances in order before you start seriously looking for a home will allow the process to proceed smoothly without any wrinkles that may cause you to not qualify for a home you really want.

Finally, as you start preparing to gather all of your documentation, it is important to check your credit reports and credit scores before you begin the home searching process. Again, this will make everything much easier in the long run.

If you have any questions about the mortgage process, please feel free to call me.

Franklin Loan Center | NMLS 237653
Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, 4131316
For questions or concerns please email