loan commitment? - oh ok....

Mortgage and Lending with FHA EXPERTS - Baltimore's #1 Mortgage Lender-FHA-VA-203K-


How solid is a loan commitment?


There are many schools of thought regarding what an actual "approval", " pre approval", "loan commitment" and tons of other similar terms mean to a borrower.

Many times loan officers and realtors alike put on blinders when looking for that magical pre approval letter that allows their client to go find a house. But is it always a solid commitment everyone can stand behind?



But you said....

After almost 20 years of making loan decisions and funding deals I can offer up some insight to the question, "what is a loan approval - really?"

In today's mortgage lending environment especially, but it really has never changed, a solid loan approval is when the following has happened.

Income, assets and any other supporting documentation has been received, a loan package has been delivered to underwriting and an underwriters has validated the file and issued a thumbs up.

Until this process happens, the truth is you are dealing with a make believe loan.



So the underwriter says all is good - now what?


An underwriter is not only responsible for the credit side of the file, they need to sign off on the "legal" side of the file. How a title report comes back from the abstractor can have a huge effect on a deal. Title work is usually not ordered until a contract has been signed by all parties.

Here we go again, a completely underwritten credit file by the underwriter and the title report comes back with issues.
Sure the chances are slim that title, appraisal, home inspection reports will hold up a deal... until it happens to you.....

Our lending team prevents surprises by collecting all the documentation needed to approve a loan upfront, before any promises are made.



That sure is a lot of what if's...

But what if your loan was ready to close and the lender comes up with an issue because something was overlooked, a question was not asked, the loan was not approved by an underwriter.

A pre approval is not worth the piece of paper it is written on until a credit file has been submitted and approved by an underwriter.

I built my company supplying high quality information and delivering nothing but the facts. I can not do business any other way. If you have a mortgage related question, gives us a call or visit the website. We look forward to working with you soon.

Will Steneman - President & Founder
Happy Mortgage







Comments (2)

Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

Realtors like to say: "The pre-approval is only as good as the paper it is written on"

They are WRONG!!!


The pre-approval is only as good as the loan officer issuing the pre-approval.


You can count on Happy Mortgage!!



Feb 02, 2010 12:33 PM
Letitia Stevenson
BHHS Fox & Roach | - Greenville, DE
Listing Agent DE/PA/MD, Digital Marketer & Coach

Will, Welcome to Active Rain! Active Rain is a great place to share your knowledge, expertise and thoughts, as well as network and learn so much from the vast pool of talent already onboard.

Welcome Aboard and Much Success in 2010!

Feb 09, 2010 04:48 PM