The mortgage approval process can be long and complicated, but understanding it can help you get through it more quickly. Here are the expectations per part of the process.
Prequalification Letter: A Maximum of Three Days
A prequalification letter is a mortgage lender note stating how much money you could borrow from them. This is based on an initial review of your finances and is not a guarantee that you will be able to borrow that much. However, it can give you a good idea of what you can afford and help you avoid signing up for a mortgage outside your budget and credit score. The letter usually includes:
The type of loan you qualify for.
The maximum amount you can borrow.
The interest rate you'll receive.
The monthly payment you'll need to make.
The loan term.
Info on whether the loan is fixed-rate or adjustable-rate.
A prequalification letter is not a guarantee that you will receive the loan. Still, it gives you a ballpark figure of how much you can borrow and gives lenders confidence that you can repay the mortgage no matter the circumstance.
Pre-Approval: About Three Days to Several Months
Preapproval is the best way to confirm your creditworthiness without having a purchase contract. You will fill out a mortgage application, and the lender will verify the information you provide and perform a credit check. If you pass this part, lenders will give you an offer to lend a specific amount that is good for 90 days.
For a mortgage pre-approval, you will need to provide more information to the lender. The application process is likely to take more time. You should receive a preapproval letter from the lender within ten business days after you have submitted all of the required information.
Final Approval: A Maximum of Two and a Half Weeks
The loan application goes to the lender’s underwriter for final approval. They will examine the application and supporting documentation to ensure that the borrower meets the lender’s creditworthiness and loan eligibility guidelines. The underwriter may approve the loan, conditionally approve the loan or deny the loan.
How You Can Make the Mortgage Approval Process Faster
The length of time in each process is down to due diligence. Bankers and lenders want to ensure their investment (lending to you) won’t yield negative profits if you default. This is why they screen applicants carefully. You can make your mortgage application and process much faster by doing these every before getting one:
Guaranteeing your credit score: If the loan product you’re applying for is out of range from your credit score, don’t get that. You will go under more scrutiny from lenders and eventually get denied.
Decrease debts: A mortgage is another debt you must take in along with your other financial obligations. Get rid of those smaller loans before applying for a mortgage so lenders know you have the extra funds to pay.
Pay the highest down payment: It may hurt initially, but doing so usually decreases the monthly amortization and overall interest rate.
Get Quick, Easy Mortgage Approval from Lakeview Mortgage Bankers Now
Let Lakeview Mortgage Bankers take you through a fast, simple, and easy mortgage process from step one. We help you get the lowest rates for home loans and make your housing dreams come true for you and your family. Learn how to be a part of this by contacting our Agent today through our website!