In today’s competitive real estate market, potential home-buyers need every advantage they can get.
One way to differentiate your offer from the myriad of others is a true “TBD underwritten” loan approval.
I’m not talking about the typical pre-qualification letter that is a cursory overview of a borrower’s ability to gain an approval, but a fully underwritten approval that is only waiting for a contract.
This process is for the home-buyer who wants a solid, iron clad pre-approval that has been fully underwritten and signed off by mortgage underwriters.
How does that work?
Well, it works very similarly to a full-fledged underwrite – except the address is left blank – or “TBD” (to be determined). The underwriter analyzes the file as if it was a true loan – and provides the actual loan conditions that the borrower must meet.
What’s the downside?
The only real downside is time. This process could take as long as a few weeks, because all documentation needs to be gathered (tax returns, W2s, pay stubs, bank statements, etc.) and then analyzed by the underwriter.
What’s the advantage?
There are a multitude of advantages. First and foremost, the borrower will know the exact size of the mortgage that they will be able to qualify for. They will have a very good idea of the monthly payment and be assured that the loan will go through.
Equally important, the offer you submit will essentially be like a cash offer. The real estate agent presenting the offer will share with the seller’s agent that the mortgage approval is actually confirmed – not pre-qualified. This will make your offer much more attractive to the sellers, as they don’t have to be concerned about mortgage approval.
Finally, the closing can take place more quickly than standard financed transactions. Essentially all that’s needed is an appraisal to confirm the value of the property. Instead of a 30 to 45 day close, these can be done in less than 20!
If you know that you will be purchasing a home in the near future, ask your mortgage lender about a “TBD approval” to see if that’s an option. If so, I highly recommend that you go through the process early – and in that way you will be miles ahead of your buying competition!
Please do reach out to me for more information, as I can absolutely help you with a “TBD” underwrite!