Posts

Study Shows First-Time Dallas Homebuyers Look for Financing First

A housing report by the Washington Post shows that first-time homebuyers get pre-approved before house hunting. In the Washington Post’s housing report, they found that 74% of homebuyers start their house hunt in areas like Dallas, Texas, by researching financing options and getting pre-approved with a local Dallas lender. For first-time homebuyers, that percentage increases […]Read More

No “Business Funds” Please

We have a section in our “Buyer’s Guide” on our website titled Actions to Avoid After Getting Pre-Approved. It includes all kinds of actions that borrowers need to avoid so they don’t slow down their transaction or blow up their ability to qualify altogether. Actions to avoid include co-signing for another person’s debt; filing tax […]Read More

Why We Ask For So Much When Pre-Approving Buyers

In April I caught my dog Kevin issuing pre-approvals and blogged about it. 😊 I was being mildly facetious, making fun of all the companies that issue “pre-approvals” based solely on “DU” findings and/or cursory reviews of pay-stubs, W2s and credit reports. “DU,” once again, stands for “Desktop Underwriter” and it is the software that […]Read More

Why Interest Rate Might Be Higher at Contract Time Than at Pre-Approval Time; Not a “Bait & Switch” :)

We pre-approved a borrower in August and sent him numerous estimated payment scenarios, based exactly on the interest rates available at that time. When he went into contract in mid-September, we locked him at a 1/4% higher rate than what we estimated in August. The borrower was upset b/c he thought we pulled a “bait […]Read More

How Long Is a Pre-Approval Letter Valid? Forever, as long as…

We have over 800 pre-approved borrowers in our database – all closely tied to their respective referral sources I might add. As an aside, each pre-approval requires about two to four hours of labor, depending on complexity, with additional hours often required for scenarios, questions, advice, calling agents, etc. Our historic conversion rate for pre-approved […]Read More

First-Time Homebuyers Hunt for Financing Before Houses

A new housing report by the Washington Post shows that first-time homebuyers get pre-approved before house hunting. First-Time Homebuyers Look for Financing First In the Washington Post’s latest housing report, they found that 74% of homebuyers start their house hunt by researching financing options and getting pre-approved. For first-time homebuyers, that percentage increases to 85%. […]Read More

Watch Out For A “Credit Refresh;” Don’t Pay Cards Down to Zero or Close Them

We once had a borrower who stopped making mortgage payments on one of her properties after we pre-approved her. A few days before funding, we ran a “credit refresh” only to find out she had late mortgage payments and her credit score had dropped to 617 (we had to pull the funding and re-structure her […]Read More

Pre-Quals Vs. Pre-Approvals; Huge Difference!

PANICKED BORROWER ON VERGE OF LOSING DEPOSIT We had a borrower in contract come to us a few weeks ago in panic mode. The reason? He was on the verge of losing his earnest money deposit b/c his loan had just blown up at America’s largest mortgage lender. The loan officer had only done a […]Read More

JVM’s “Don’t List”; Things Not To Do After Getting Pre-Approved

With every pre-approval letter, we also include what we call our “Don’t List.” These are suggested actions to avoid to ensure borrowers remain qualified. These actions do not always kill deals, but they definitely have the potential. 1. Do NOT make large deposits that cannot be explained. All “large deposits” must be explained and/or “paper-trailed.” […]Read More

JVM’s “Don’t List”; Things Not To Do After Pre-Approval

With every pre-approval letter, we also include what we call our “Don’t List.” These are suggested actions to avoid to ensure borrowers remain qualified. These actions do not always kill deals, but they definitely have the potential. JVM’s “Don’t List:” 1. Do NOT make large deposits that cannot be explained. All “large deposits” must be […]Read More

Credit Re-Fresh; Don’t Pay Cards to Zero or Close Them Out

We recently had a borrower who stopped making mortgage payments on one of her properties after we pre-approved her. A few days before funding, we ran a “credit refresh” only to find out she had late mortgage payments and her score had dropped to 617 (we had to pull the funding and re-structure her loan). […]Read More

Calling Listing Agents – We Do It Often; We Like To Do It; It Works

We got several borrowers into contract this week only after speaking with the listing agent at length. B/c we fully pre-underwrite and pre-approve every one of our borrowers, we know them well and we can tout them with the utmost confidence. We love calling listing agents b/c it helps everyone, and it is often the […]Read More

Beware of “2106” Expenses; Lenders Must Do Full Pre-Approval

This is a reminder to watch for “2106 expenses” buried in tax returns. It is also why lenders MUST do a thorough pre-approval for all borrowers, as opposed to a cursory review. 2106 expenses are tax deductions that salaried/W2 (not self-employed) borrowers take for work-related expenses – uniforms, travels costs, education, etc. These expenses can […]Read More

24/7 Availability; Sunday Night Emergency Pre-Approvals

One of our favorite Realtors texted me last night and asked if I could do a fast, Sunday Night pre-approval so they could make an offer this morning. The borrowers were a Google employee and a Smith College Neuroscience professor. They told me that they had high incomes, no debt and perfect credit. I have […]Read More

Salary + Commission: Need History of Commissions

We have a borrower who averaged $160,000 over the last two years in a commission sales job. He just started a new job with an $85,000 base salary, but with much more commission potential. We may be able to use the average of his previous years’ commissions even though they were earned at a different […]Read More

“Pre-Qualification” vs. “Pre-Approval;” No Mas “Big Banks”

A Realtor sent us a pre-qualification letter yesterday from another lender for one of our borrowers. The letter was shockingly vague and non-committal. It was written that way b/c the lender had not actually gone through the borrower’s complete file. We have gone through the borrower’s file with a fine-tooth comb. The other lender was […]Read More

How JVM Educates Buyers In Need of a Pre-Approval; JVM Does Much More

JVM probably has the most thorough Home-buyer pre-approval process in the industry. We follow these steps with every buyer. Step #1: We talk to buyers at length. We get to know them. We discuss income, down payment, credit, desired purchase price, financing options, the purchase process, etc. We also spot and address potential issues. Step […]Read More

“Rate Quotes” Are Worthless/Waste of Time Prior to Pre-Approval

We sometimes have buyers who insist on getting rate quotes before getting “pre-approved”, or before they give us any information. We strongly discourage rate quotes at the front of the approval process for a variety of reasons. First and foremost, markets change often. Lenders can quote very aggressively when they know borrowers are not even […]Read More

Pre-Approvals = Serious Business; Need ALL Documentation for Assurance

We used to make the grave mistake of issuing pre-approvals with too little information in hand; without a complete file. We would mistakenly rely on other banks’ pre-approvals, or just W2s and pay-stubs without tax returns, or just 2 pages of tax returns without all schedules. We would never do this in today’s market. We […]Read More

What Not to Do After Getting Pre-Approved – Important!

Every time we send a “pre-approval” letter, we also send an accompanying list of suggested actions to avoid. We call it our “Don’t List”. This list is essential to prevent borrowers from creating a lot more work for themselves or from jeopardizing their pre-approval status altogether. Below is our “JVM Don’t List” for pre-approved borrowers […]Read More