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Just Because You're Pre-Approved Doesn't Mean You're Done!

Understanding the difference between pre-approval and full loan approval.

Congratulations! You've been pre-approved! You've made the wise choice to get loan approval before you shop for your dream home. It's a smart first step... but you're not done yet!

Pre-approval means that you've made a loan application and submitted financial information such as paystubs, W2's, and bank statements. We've reviewed that information and obtained a credit report. At Fairway Independent Mortgages, it also means we've submitted your loan for underwriting review, usually through a computerized automated underwriting. Although your loan is pre-approved, Our work together is just beginning.

If you are pre-approved through automated underwriting, that means that your conventional loan is eligible for purchase by an investor. Such loan approvals are always subject to the Conditions of Approval. We must obtain all the information required by the computer system, such as W2's and paystubs. At Fairway Independent Mortgages, we always ask for financial information before underwriting the loan. However, we must also be able to provide any additional documentation required by the underwriting system, including an acceptable purchase agreement and an appraisal before issuing a full approval.

Full approval means that all the items provided to us (including the appraisal) have undergone a documentation review to assure that they meet the Conditions of Approval. For instance, if you provided a paycheck which clearly shows that you make sufficient income to qualify for the loan, but that paystub lacked a Year to Date income amount, we may have needed to obtain a written Verification of Income to properly document the loan. This is normal, and not an indication that your loan was not really pre-approved.

Your obligations: We expect that you have chosen Fairway Independent Mortgages as your lender. We have invested substantial time and money in the service you needed to allow you to compete for the home of your dreams. We have legal responsibility as well: we have had to issue written assurance to the seller that our approval is valid. After you buy a property, you must pay for the appraisal promptly, and lock in your loan in a timely fashion. We may ask you to get us additional items of loan documentation or to update items which are too old. We need prompt action from you when we ask for these items. We need you to tell us what you are doing with your finances, before you do it, even if it makes perfect sense to you. We are partners in this and together we are making your dream a reality!

- Kris Wilson

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