Get Approved, Not Pre-Approved

 In Common Questions, First-Time Home Buyers, Qualifying for a Mortgage

When you submit an offer for a house, you generally need to include a pre-approval letter from a lender, so the seller will know you qualify for the mortgage you need.  Did you know that you can get fully approved for a mortgage before making an offer, rather than just getting pre-approved?

Here’s what you need to know.

A pre-approval, when done correctly, means the lender has your loan application, pulled your credit, verified your income and assets, and run your loan file through the underwriting software provided to lenders by Fannie Mae or Freddie Mac, the two companies that purchase the majority of the mortgages in the United States.  If the information entered in the software is correct, and the software says you are eligible for the loan, you are pre-approved.  However, an underwriter has not yet reviewed the loan file to make sure everything was done correctly.  If the underwriter discovers a mistake, you could be denied for the mortgage, even though you have a pre-approval letter.

Real estate agents understand how this works, and they know there are lenders who just don’t do their jobs correctly, so in many cases, a pre-approval doesn’t mean very much. 

Here comes the good part.

If your loan file has already been reviewed by an underwriter, it’s possible to get an approval, rather than just a pre-approval, and your loan is guaranteed to close.  If you have a full approval, the only things the underwriter will need to verify after you are under contract is the appraisal and the title documentation.  Your approval effectively makes your offer the same as a cash offer.  

How do you get an approval before making an offer on a house?  That’s the easy part.  We can submit your loan file to underwriting without a contract, and our underwriter will approve your loan, even though you don’t have a property picked out yet.

It takes a couple of weeks to do that, but a couple of weeks up-front is much better than wasting months getting offer after offer rejected because you aren’t fully approved for the loan you need.

Also, getting a full approval is free.  It’s a service we offer so you can get your offer accepted.  

We have done this for many of our clients, and all of those clients have been able to purchase a house quicker and easier than those who do not have a full approval.

If you want to get your offer accepted quickly, contact us today to get started.  It’s easy and it’s free.

Recent Posts

Start typing and press Enter to search

2022 Loan Limits and Down Payments for Denver and BoulderInterest Rates, Up or Down?