The Importance of an Accurate Approval
An accurate approval is the most important thing you can be armed with when house shopping. Unfortunately, most approvals out there are not accurate and leave room for problems to come up. When it comes to an approval there is only one person who officially makes the decision about the approval, that is the Underwriter. If an approval was issued by anyone else that means the underwriter could have a different opinion.
Recently I had a buyer who was pre-approved by a major bank and was house shopping. He and his wife found a home they loved and paid for a home inspection and appraisal. Shortly after this, they received a phone call from that bank indicating that they were not able to use his wifes income for qualifying and their loan was no longer approved. This is an extremely difficult situation for anyone to be in. Unfortunately, this situation happens by design. You see most lenders don’t want to have an underwriter spend time reviewing things until they can confirm they have a serious home buyer. What does that mean for the home buyer? That means that you don’t technically have an approval until after you have found the home, after you have paid a deposit, and most likely after paying for appraisals, inspections, etc.
It is for this reason that we at Frontline Financial want to shake up the lending industry. We want to make sure that an approval is as accurate as possible. In order to do that, we must have an underwriter review it from the very beginning. Rather than a pre-approval, we prefer to do a Full Underwriting Approval.