When Is A Mortgage Approval An Approval?

March 24th, 2019
approved

When is an approval really an approval? When is an approval only a conditional approval? Below are the different levels of “loan approval” you can get for a mortgage:

1. Pre-Qualification:

This is done before you make an offer on a home. This is only a loan officer analysis, and supporting financial documents are not required. This is a review of the applicant’s income and debts using standard methods of determining housing and debt ratios to indicate the maximum loan amount for which an applicant would qualify, subject to the satisfactory appraisal, further verifications of income, employment and credit history.  This is the lowest form of analysis you can have done.

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Automated Underwriting Versus Human Underwriting

August 5th, 2018
approve or reject

When you’re ready to buy a new home, one of the first things you have to do is take steps to get your financing in place. Mortgage approval is based in part on an automated underwriting process. Unless you plan to pay in cash, you need to secure a mortgage loan. It is beneficial to get a pre-approval letter from a mortgage lender before you even make an offer. Having your loan pre-approved can show a seller you are a serious buyer with adequate funds. You can also reduce the risk of the contract falling through.

Lenders typically use one of two underwriting processes for mortgage loans: automated and manual. Understanding the basics of how these types of loan approval work can give you confidence when applying for your mortgage.  Read the rest of this entry »

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How Much Documentation Needs To Go Into a Pre-Approval Letter?

July 15th, 2018
paperwork stack

Today’s real estate market can be competitive for everyone, no matter what price point you’re shopping at. That’s why it’s important to understand the ins and outs of the home buying process before you hit the market. Let’s talk about what getting a mortgage pre-approval letter involves, how you can do so, and why it’s a good idea for anyone heading into the market for a new home. Read the rest of this entry »

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Why Do Sellers and Realtors Want Me To Be Pre-Approved?

June 24th, 2018
pre approval approved

Homeownership is a major component of the American dream as it provides you with your own piece of property to put down roots and live your life. You might think the process starts when you first go out hunting for houses or condominiums, but it often begins long before the initial meeting with a realtor when you contact a lender for pre-approval. Homes are major purchases, and it’s understandable that you have to meet certain qualifications before the transaction goes through. Here are a few reasons why the seller and realtor might want you to get pre-approved, as well as an overview of the entire process. Read the rest of this entry »

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Pre-Approval Letter Versus Pre-Qualification Letter: What Is the Difference?

June 3rd, 2018
qualification

When you’re beginning the home-buying process, figuring out what you need to get your mortgage loan can seem complicated. You may even be tempted to find your dream home first before you apply for a mortgage. However, going through the pre-qualification and pre-approval processes at the start of your search can make the entire experience go more smoothly.

 

Before you meet with a lender or mortgage broker, you should have a good understanding of how the loan process works and what you’ll need to provide in your application. This guide covers the basics of loan application, qualification, and approval. Read the rest of this entry »

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Self-Employed Mortgage Borrowers Need 1 Or 2 Years Of Tax Returns?

March 11th, 2018

Self-Employed Mortgage Borrowers Need 1 Or 2 Years Of Tax Returns?

 

I constantly get questions about whether or not someone who is self-employed needs a minimum of two years of tax returns, or if they can get away with one year of them, when qualifying for a mortgage. I thought I would answer this question and put it to rest. Please realize guidelines can change in the future. As of the date of this blog, the hyperlinks below are guidelines related to the history that self-employed people need, and the number of years of tax returns they need to document their income. Read the rest of this entry »

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New Loan Limits For 2017

February 28th, 2017

The mortgage loan limits have been changed for 2017. For Conventional loans the new limits are:

Conforming loans are:

Units
1 $424,100
2 $543,000
3 $656,350
4 $815,650

For Conforming “High Balance” loans in designated high cost areas the new limits are:

Units
1 $636,150
2 $814,500
3 $984,525
4 $1,223,475

Find more details on Conventional loan amounts click here.

Any Conventional loan amount which is higher than the above limits is considered a Jumbo loan (aka non-conforming) and is subject to different underwriting guidelines.

To look up FHA loan limits for your area click here.

To look up VA loan limits for your area click here.

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No Escaping Mortgage Guidelines

November 10th, 2016

brian-martucci-underwriters-referees-mortgage-blogThere’s no outsmarting or escaping the mortgage guidelines upheld by underwriters, no matter how much income or assets the buyer has. The purpose of the underwriting process is to check the loan applicant’s credit, financial capacity, and the collateral. The underwriter’s main purpose is to make sure everything in the application meets the loan’s guidelines that you are applying for, whether that be from Fannie Mae, Freddie Mac, FHA or VA. Read the rest of this entry »

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