What Does it Take to Pre-Approve a Buyer?

shutterstock_630815573(1)8/29/19- I hope you are having a great week so far!  This is going to be a great weekend to buy a house with Temperatures near 100!

We have run into a lot of loans that buyers say they are pre-approved with an online lender or bank and when we get to them we ask for all kinds of stuff that nobody ever asked for before!  Like Paystubs, W-2 forms, bank statements or even tax returns.  Be careful of the approval you have as it may not actually be an approval!

Getting a buyer pre-approved can be simple or it can be difficult.  We love employees that are straight salary with no bonus, no commission, and no overtime and we can generally pre-approve them in 15-20 minutes.  When we get to the buyers that are hourly, or hourly plus commission, or buyers that have a lot of overtime, then we start to see delays.  We could probably take a guess in the first 15 minutes and like some lenders do and give a pre-approval letter without running credit,  or just take am educated guess, or better yet an uneducated guess, but we don’t like to make mistakes!  So we get a verification of employment to spell out the overtime, or commission.  It will say how many hours an employee works per week and it will let us know when the last pay raise was.  Many employers don’t fill out VOE’s or they fill them out wrong and they don’t line up with W-2 or the pay stub.  Then we have to go back at them and ask for more info, or we go back to the buyer and ask for the last pay stub of 2017/2018 so we can try to decipher what we need.

On self-employed buyers we have to get all of the taxes including their corporate tax returns which is sometimes a fight in itself.  Oh, and don’t get me started when they have 8 different K-1’s!  We do not like playing from behind, and we never want to be the reason that a house falls out of escrow.  Can we go faster?  Probably, but when we are asking for a VOE from an HR person and they get it to us in 2-3 days, should we be pushing from moment one so they do a sloppy job and we have to go back and push for another favor?   It is a fine line and I am not sure that I have the right answer.  All I can say is please push your people to get their information in before they find a house so we have them pre-approved and are ready to close a fast easy escrow!

Things are hopping right now and I am seeing multiple offers with many of our buyers.  A Good strong pre-approval is great and I will be around all weekend to help!

Interest rates slid again over the past couple of days and they look great.  Below are rates based on a 740 Credit score and rates are subject to change without notice:

  • 30-year fixed conventional 1st Mortgage with 25% down – 3.500% (3.547 APR). Loan amounts up to $484,350.00 = $2174.95
  • 15-year fixed conventional 1st Mortgage with 25% – 3.000% (3.084 APR). Loan amounts up to $484,350.00 = $3344.83
  • 5/1 ARM 1st Mortgage –  25% down – Fixed for 5 years and then becomes variable – 3.500% – (3.594 APR) Loan amounts up to $3,000,000.00 = $13,471.34
  • 7/1 ARM 1st Mortgage – 25% Fixed for 7 years and then becomes variable – 3.625% – (3.714 APR) Loan amounts up to $3,000,000.00 = $13,681.54
  • 10/1 ARM 1st Mortgage – 25% Fixed for 10 years and then becomes variable – 3.750% – (3.844 APR) Loan amounts up to $3,000.,000.00 = $13,893.47
  • 30-year fixed 1st Mortgage FHA loan 3.50% down – 3.250% (4.663 APR). Loan amounts up to $484,350.00 = $2144.81 + $349.08 PMI = $2493.89
  • 30-year fixed 1st Mortgage VA loan 0% – 3.250% (3.296 APR). Loan amounts up to $484,350.00 = $2107.92
  • 30 Year Fixed rate 1st Mortgage Jumbo Loan 25% down – 4.250% (4.344 APR).  loan amounts up to $3,000,000.00 =14,758.20

I will be in and out of the office all weekend and Monday!  I was out last weekend so there is a lot of catching up to do or I will feel bad about myself for the rest of my life.  My cell is  661-714-6258 and my office is 661-260-2970 xt. 2222.  Having a great weekend is selling a house and referring your clients to me and my team so you know they will close on time!  So have a great weekend and I will look forward to hearing from you!