Making an offer on a home in Texas, get this or lose that home! Most folks know that the Texas real estate market is hot. When you find your dream home you may face competition when submitting your offer. In order to strengthen your offer, a completed Conditional Qualification Letter (Form A) should accompany your offer. Before 2008, it was common practice to verbally ask a few questions from the borrower about credit, income, and how much money they have and issue a "Pre-qualification" letter. After 2008, the mortgage markets changed, tighter regulation, and tighter lending standards has led to a more formal process. These days for a loan qualification in the beginning stages, a loan representative should complete an application, pull credit, run the application through an automated underwriting system, like Fannie Mae's DU (Desktop Underwriter), and collect documentation to support the application. Documentation might include bank statements, w2s, and paystubs.
In the April 25, 2014, issue of the Texas Register (39 TexReg 3392), the Finance Commission of Texas adopted amendments to the Loan Status Form, see forms on link below:
There are two types of forms the State of Texas has approved. They are the Conditional Qualification Letters (Form A) and Conditional Approval Letter (Form B). Firstly, you will find it very difficult for a lender to complete form B with out a property. Secondly, the Form A is what your loan representative should provide you before you begin shopping for a home. Pay close attention to what is checked on the form. So you see there really isn't a prequalification any longer, but a conditional qualification.
What I have found is that an accurate application and the more items checked on the conditional qualification letter results in a smooth loan process. Again a completed conditional qualification letter could strengthen your offer to land that dream home in Texas.
If you are buying a home seek a licensed residential mortgage loan originator who you trust will review your complete financial situation. In Texas, contact Jimmy Smith for questions or a no obligation loan consultation.
Jimmy Smith, NMLS#1089067
firstname.lastname@example.org, (214) 872-9091 Ofc