The value of a generic mortgage pre-approval = $25.00
The value of a Loan Officer who knows how to truly approve a loan = Priceless
This may sound cliché and I know it’s overused these days, but seriously, how is a first time buyer, or any home buyer in today’s market supposed to know that they can trust the person they’ve supplied their information to over the phone or internet who very rapidly, and simply states; “Congratulations, you’re pre-approved”. I’ve got news for you. You’re not.
If you have not supplied the following documentation, in addition to other documents that may be specific to your particular situation, you do not have a complete mortgage pre-approval and what you thought was a time to celebrate, could turn into a time of nail biting and rapidly graying hair from worry or sudden changes in your “pre-approval” status. So, as a homebuyer today, what should you expect to supply when you “apply” for a loan? Here’s a simple list that is nearly universally applicable:
- A complete loan application, either over the phone or internet including social security numbers, dates of birth, address, employment history, income, asset and credit history.
- Authorizations to obtain your credit report
- Two years complete tax returns
- Two years W2 forms and/or 1099’s
- Most recent 30-days of paycheck stubs for all employment
- Most recent asset statements (checking, savings, retirement etc.)
Why is it important that the mortgage company have this information before you go out looking? Gone are the days of everyone qualifies and documentation is absolutely necessary to be certain that the income, cash and credit that we are using to qualify you for a mortgage are indeed, what can be documented. The only way to insure that…get the documents upfront.
By law, all mortgage pre-approval letters issued are supposed to identify the items that the mortgage loan approval is “subject to”. i.e. If you haven’t supplied any of the above, we’re supposed to say, subject to the receipt of income, asset and credit documentation. Well, imagine you’re the seller of a home. You have two offers, both of which have mortgage pre-approval letters accompanying them. One of the letters says; This loan has been underwriting approved and is subject only to marketable appraisal and title work. The other says; This loan is pre-approved and is subject to verification of the borrowers’ assets, income and credit. Which loan approval do you lean toward accepting? Duh! Of course you want the one that sounds like the loan has actually been reviewed! It really is that simple. If you haven’t provided documentation and at minimum had a full-blown telephone conversation discussing the terms of your loan approval, interest rates, and program options, you are not in a solid bargaining position as a home buyer. Your approval is actually worth less than the piece of paper it’s been provided to you on. I suggest you start over, with someone who knows what’s in your best interest and your first step is collecting the documentation I’ve listed above before you shoot out that e-mail or pick up the phone. Nothing replaces concrete information in the mortgage lending and real estate environment we’re in today.

Would you like to learn more about how to qualify for a mortgage? Contact Carrie Guarrero Today!

Carrie Guarrero is producing Regional Manager and Vice President of Cornerstone Mortgage Company in Burnsville, Minnesota. If you are looking for Burnsville real estate, contact Carrie first!