Granted, the terms of a mortgage loan may have many conditions to be met. After all, most mortgages are for fairly large sums of money, and lenders don’t want to be haphazard with their finances. With that in mind, the underwriter and loan processor may not be individual people, but rather teams of people. Sometimes the entire processing and underwriting departments of a lending organization are working on one particular loan. With that many players in the game, you can see the importance of working with a solid, well-versed loan officer.
ORIGINATION: PRE-QUALIFICATION OR PRE-APPROVAL
The first step in the lending origination process is a pre- qualification letter sent to the buyer from a lending organization. The next step is a pre-approval letter. You might be confused. There is an important difference between a pre-qualification letter and a pre-approval letter. A pre- qualification letter is when the lender simply checks your credit and asks some basic questions such as:
• “How much do you earn?” • “Where do you work?” • “Have you filed your tax returns?”
Assuming that the buyer answers the questions with satisfactory information, a pre-qualification letter is written. At this stage of the process, there is no verification of your information. You can say you make millions of dollars per year and, assuming you have good credit, be “pre-qualified” for a multi-million dollar house.
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