Three Different Types of Pre-Approvals - Which is best?

In this episode, the host discusses the three types of pre-approvals that lenders can do for homebuyers. The first type is a verbal pre-approval, which is the least reliable and should be avoided. The second type is a pre-approval using a mortgage calculator, which is better but still not as accurate as the third type. The third type is a fully underwritten pre-approval, which is the most reliable and requires the submission of income documents. The host emphasizes the importance of getting a fully underwritten pre-approval to protect oneself in a competitive housing market.
  • (00:00) - Introduction and Goal of the Show
  • (01:32) - The Three Types of Pre-Approvals
  • (06:48) - The Limitations of Pre-Approvals Using a Mortgage Calculator
  • (09:42) - The Importance of a Fully Underwritten Pre-Approval
  • (13:32) - The Role of Income Documents in a Fully Underwritten Pre-Approval
  • (16:52) - Considerations for a Fully Underwritten Pre-Approval
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Takeaways
  • There are three types of pre-approvals: verbal, mortgage calculator, and fully underwritten. The fully underwritten pre-approval is the most reliable and requires the submission of income documents.
  • Verbal pre-approvals and pre-approvals using a mortgage calculator are not as accurate and should be avoided.
  • Getting a fully underwritten pre-approval is important in a competitive housing market to protect oneself when making an offer on a home.
  • Income documents, such as job letters, pay stubs, and tax returns, are necessary for a fully underwritten pre-approval.
  • A fully underwritten pre-approval provides upfront approval and allows for rate lock-in, but property condition and discrepancies in documents can still affect the final approval.

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