San Diego Loan Approvals
“Hi Gary. We just talked with a mortgage broker and got mortgage loan approval. Buy my wife mentioned that you’ve said some loan approvals aren’t really approvals. What did you mean?”
***ANSWER:
When is a loan approval not a loan approval? Sadly, the answer is: most of the time.
I recently got an “approval” letter stating the person was “fully” approved subject to:
1. Verifying income
2. Verifying funds
3. Verifying credit
4. Proof of any credit-related resolutions (if applicable)
5. Final lender approval
I ask you…would YOU really call that approval?
If you have a short conversation with a lender on the phone and they tell you you’re approved, they’re almost certainly lying to you and you’ve only been pre-qualified. Yes, even if they write you a letter using the word “approved”.
There are 3 levels of loan qualification/approval:
1. Pre-qualification
You’ve had a conversation with a loan agent and perhaps your credit has been run. They’ve given you their opinion of how much you’re qualified to borrow…based on their skill, knowledge, experience, and honesty. Please pay close attention to the words following the “…”!
2. Pre-approval
Your credit has been run and you’ve been through some kind of underwriting process, be it human or automated “desktop underwriting”. Your funds, assets, and employment have probably not been verified. I believe that with some no-verification loan programs (growing very rare), you could be pre-approved without going through any underwriting.
3. Approval
The above, plus all required items have been verified, the home has been appraised, title checked, T’s crossed, I’s dotted, and all is approved.
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