I sent out a pre-approval the other day to a borrower of mine here in Logan, Utah and for the first time I had the sellers real estate agent call me to ask if I had reviewed their income and asset documentation. I thought that this was interesting and it was obvious to me that this real estate agent must have had an experience where he wasted a lot of time with a borrower who he thought was pre-approved when in fact they were not.
When I first started working as a loan officer it was acceptable to simply fill out a loan application with a borrower and use the information that they gave me verbally to get a loan approval and give a pre-approval letter. Well, times have changed.
For a true pre-approval the loan officer should not only take a full loan application, pull a credit report, and import the loan into an automated underwriting engine, but they should also review the required documentation such as tax returns, W2's, paystubs, and checking and savings account statements. Only when these 4 things take place should a loan officer issue a pre-approval letter.
For a true pre-approval the loan officer should...
1. Complete a full loan application
2. Pull a credit report
3. Submit the credit report and loan application through an automated underwriter
4. Review necessary documentation such as tax returns, W2's, paystubs, and asset account statements
If you are looking to purchase a home in Logan, Utah or Cache Valley, call me at 435-755-2177.
About the Author
John Neil is a loan officer that is passionate about his profession. His goal with every transaction is to make a customer for life. The result is that 95% of his business comes from referrals of satisfied clients. If you need a cache valley mortgage, you can contact John at 435-770-2709. You can also follow him on twitter @LoganUTMortgage or facebook @facebook/MortgageNerd
Its amazing to me to think that someone would issue a pre-approval without doing this. Otherwise, everyone time could potentially be wasted.
John..I always call the Lo to confirm the loan pre approval..thanks
Gary d for Denver
I just assumed that Realtors knew that pre-approvals implied that the documentation had been reviewed. From now on, I will specifically put on the letter that it has.