By: Shawn Brown of Evergreen Home Loans NMLS#628474

Approval

Everyone seeks approval in some way, but with a mortgage be sure you know which approval you are getting!  Many people are still, “pre-qualified” for a mortgage.  This is a good place to be very careful.  A pre-qual, at times can be a mortgage professional saying; yep, sounds good.  This can be problematic if given without review of your income, credit report, and assets.  As you might imagine the picture can change when those facts arrive!

So next would be pre-approval.  A mortgage professional should be in receipt of all of the above and in addition, run your loan file through automated underwriting.  This is an indication that your file meets guidelines as long as the facts can be proven as entered.  This gives a good level of assurance that you are ready for the loan you need.

Conditional Loan Approval is a third level involves having an underwriter review and sign off on your loan.  This is the strongest of the three and can make a difference in a competitive or multiple offer situation. This can involve a little more time up front especially for those that have variable income or are self-employed.  Some lenders will even issue a guarantee to sellers once this level of approval has been met.  This just leaves the appraisal and title to be cleared and can allow for faster closing once you find your property.

Are any of the above a 100% guarantee you will close? No, many things can go wrong.  An appraiser can indicate a lower value. At times a buyer prior to closing can have job changes (by choice or otherwise!) this can delay or even prevent a closing.  Buyers can incur other debt before the mortgage closing that causes delay or failure to close.  

The best way to stay on track is regular communication with your loan officer and Realtor about any changes to your financial picture.  This will keep you on the path to homeownership!