Getting approved for a mortgage without knowing which home you want to purchase might seem unnecessary. But a Fairway Advantage Pre-Approval can help you compete with cash offers, even when buying a house in today’s market feels like a fight to the finish line. Let’s look at how an underwritten pre-approval will allow you to get conditionally approved for a mortgage even if you haven’t found that perfect home yet.
What makes Fairway Advantage Pre-Approval different?
Upfront underwriting, also known as To-Be-Determined (TBD) Pre-approval, is a provisional process that evaluates and validates your financial situation at the beginning of the mortgage process instead of at the end. More than just a pre-approval, this is an actual loan commitment from a Fairway underwriter, not just your loan officer. When you make an offer, sellers know your approval is as good as gold.
Which Documents Will Be Reviewed? Much like traditional loan underwriting, the process requires supporting documentation showing financial stability. To verify your eligibility, an underwriter will review the following:
- Past two years of W-2s
- Most recent one-month pay stubs
- Past two years of tax returns
- Asset documentation or proof of available funds
Underwritten Pre-approval vs. Pre-qualification: The most notable difference between pre-approval and pre-qualification, is the underwriting review. If you opt for pre-qualification, you must submit income, asset, and credit-related information that will initially land in the hands of your mortgage loan originator. At that point, your mortgage loan originator will review the information and determine which loan programs and amounts you could be qualified for on your home purchase. Because pre-qualification does not involve an underwriter reviewing your information at the onset, loan circumstances are subject to change as you move through the home-buying process.
On the other hand, our Underwritten Pre-approval Program allows for upfront underwriting and faster issuance of conditional approval of a loan amount. That is why an underwritten pre-approval is so valuable. Instead of having an underwriter review your information later in the process, it is sent directly to them. This way, you can get a well-founded assurance about which loan program and the maximum loan amount you can use to purchase the home of your dreams.
What Are the Other Advantages of Underwritten Pre-approval? One of the most significant advantages of underwritten pre-approval is securing an upfront review and verification of your credit, income, assets, and loan application by an underwriter before you decide on your perfect home. It’s a great way to get ahead of the game, understand your budget, and start shopping with certainty.
An underwritten pre-approval is the ticket to peace of mind because it drastically reduces surprises on your way to the closing table. Plus, an underwriter’s stamp of approval gives realtors and sellers confidence that issues with your mortgage loan are unlikely. This earns you more negotiating power than other potential buyers when you finally find the house you want.