Mortgage (Pre-Approved) “Approval” [Home Loan] What is a Pre-Approval?

Hey this is Chris Trapani the
mortgage Pro! Today I want to introduce you to what is a pre-approval, how does
it work, how do you get one what do I need it for?! Okay here’s why you need to be
pre-approved! One – you can’t go see a house, fall in love with some house and
then find out you’re not approved or not approved for that amount. That’s really
not wise on your part and it’s really not good for the realtor to show you
houses if he doesn’t know you could be a pre-approved. Plus what happens is every
offer must go to the listing agent. The listing agent will present it to the
seller of the house, but if they’re not pre-approved well, wheres the pre-approval
letter? Wheres the DU? That’s called the desktop underwriter approval goes right
through fannie mae’s website if you’re not approved they’re not gonna accept
the offer but how do they know if you’re approved or not so it’s really not wise
to do that you’re better off going through the approval process with me I’m
gonna help you I’m gonna hold your hand it’s not that complicated! Okay so people ask all the time what’s
the difference between a pre-qualification and a pre-approval
well I’m gonna start with what is a pre-qualification here’s how it works I
can make a phone call to you we can talk a couple of minutes hey what’s your
credit score Harry oh okay 650 great Harry how much money do you
make great that sounds good what are your debts like Harry okay we
can have this long conversation and I’m gonna ask you all the details do you
have a bankruptcy are you a first-time homebuyer
are you married do you have children are you divorced do you pay child support
they pay out I’m gonna ask you all these kind of questions and you know it takes
15 minutes ten minutes or so and I can pre approve you based on my 27 years
experience I’m gonna know that you’re pre-qualified to buy a house but it’s
not the same as a pre-approval .Okay so here’s what a pre-approval is you’ve
answered all those questions for me already awesome now show me on paper
what do I mean well you told me that you make $32 an hour on your job I need to
see you pay stubs so I can actually enter it into the computer so we know
exactly and calculate exactly what your income is you told me your credit score
was a 650 well sometimes I’ve run it and guess
what it’s a 690 that’s awesome even better sometimes I run it when you think
it’s a 650 and you run it off one of those consumer type credit report
agencies and it actually turns out to be a 580 so we need to really know for a
pre-approval exactly what your score is we also need to know how much debt do
you have and a lot of people say well Chris my car payment is $400 a month
well it’s really four hundred and forty two dollars and fifty cents you don’t
get qualified off the four hundred you have to get qualified with the exact
amount same thing with credit cards I spend about 50 bucks a month well if
it’s fifty three we got to count those three dollars every little thing counts
how do you get paid do you get paid hourly do you get paid salary a lot of
times most people we’ll actually miss calculate their
income really bad so we have to take a look at all of these things you have
money in the bank Oh Chris you know I got 12 grand and I look at the bank
statement and it says ninety two hundred well I just wrote a check to pay my bill
let’s see I have to know these things so I could do a full pre-approval once I
have all your data usually two years taxes sometimes three I enter everything
into a computer I’m running it right through Fannie Mae and Freddie Mac’s
website I am looking at your credit it’s gonna evaluate your credit it’s gonna
evaluate how much money you have saved how much is in your 401k and which is an
annuity whatever the amount of money you have oh you’re gonna get a gift it’s
going to evaluate that it tells me okay you’ve been on the job for one year in
eight months what about your previous job we’re gonna
evaluate that it’s gonna run through a computerized algorithm and it’s gonna
give us what we call an approve eligible that’s exactly what we’re looking for
and then we could start the home buying process okay I’m gonna take this even to the
next level it’s better than being pre-approved guess what that is it’s
actually being approved how do I do that well I’m gonna take all that
documentation that I have analyzed my assistants have analyzed we’ve entered
into the computer and we’re actually gonna submit it to the underwriter the
underwriter is the person who approves or denies the file they are think of it
in legal terms they are judge jury and prosecuting attorney all in one and I am
the defense attorney representing you and the judge jury and prosecuting
attorney underwriter they’re making believe you a lying cheating and
stealing trying to get that loan through so I have to forensically prove on paper
that you’re telling the truth they’re gonna look at all the numbers everything
I’ve already put in and they’re gonna issue the approval do you know how
powerful that is when you go to make an offer now you’re out seeing homes with a
realtor you make an offer but you’re not making an offer from a position of
weakness oh is this loan going to get approved we
get to make an offer state this loan is already underwriter approved sometimes
that actually helps you get a better price okay now I’m really excited for you
because you are approved I want you to go see the houses now I want you to go
fall in love with the houses now I want you to make offers on that house is your
dream house and I want you to have a letter in your hands that says I’m
already approved to buy this house that’s an awesome thing to do and
together we’re gonna fire your landlord

4 comments on “Mortgage (Pre-Approved) “Approval” [Home Loan] What is a Pre-Approval?”

  1. Fire Your Landlord says:

    Don't just get pre-approved! Call me and get fully approved while you shop for a house!

  2. Toni Williams says:

    Takes the fear out of those terms. They can be confusing. Great explaination!

  3. Dora Unruh says:

    Great Explanation, very simple, and clear, God Bless you.

  4. Subzerro Billy Miller Miller says:


Leave a Reply

Your email address will not be published. Required fields are marked *