Mortgage Pre-Approvals Explained
/Dan Hubrich of Mountain View Mortgage is back and this month he’s explaining mortgage pre-approvals - how they work and the process to get one.
Let’s talk about the mortgage pre-approval process this month! The first step is to get a loan application. This just consists of your 2 year work and residence history, income and asset declarations, and a review of your credit and debts. This can either be done person, over the phone, or online. Step 2 is to review your income and asset documents and to make sure everything checks out. If a client is self employed we also need to review 2 years of personal and business taxes. If someone gets commission or bonus income, we will order a VOE (verification of employment) from the borrowers employer to make sure we have accurate numbers. Once we have verified all of that, we then run your file through Fannie Mae and Freddie Mac’s automated underwriting system. Nearly all loans end up with Fannie Mae/Freddie Mac lenders at some point so most lenders will underwrite and pre-approve files based on their guidelines. When we have approval on the automated system, we can then issue the official pre-approval letter. It’s good for 90 days and if it goes past that we just have to reverify everything to see if anything has changed. If the loan officer has done their job correctly then there shouldn’t be any issues when the live underwriter reviews your file for final loan approval because they are using the same guidelines and benchmarks to sign off on everything. Let me know if you have any questions. Thanks!