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Mortgage pre-approval is one of the keys to securing a real estate purchase in Colorado.
Pre-approval can be used for home purchases or refinance transactions. Previously borrowers
had to pre-qualify, giving them an estimate of purchase price or a
monthly mortgage payment. However, with the advances of internet based underwriting via
Fannie Mae and Freddie Mac, mortgage pre-approval can be accomplished in minutes. Mortgage pre-approval begins with the application, which can be taken over the phone or in paper copy (a paper copy will be necessary to receive final approval). The application covers essential mortgage elements such as:
This information is put into a internet based orgination system that is then uploaded to Fannie Mae or Freddie Mac based on loan product selected. The response comes within minutes. The "findings" determine loan eligibility, maximum loan amount, maximum interest rate and the number of verifications required to secure the mortgage. A credit report also is drawn electronically to establish credit score and the accuracy of the liabilities of the borrower. Some of the findings will require a physical underwriter to review all documentation to determine eligibility of a mortgage. In all cases, the bank or lender that the mortgage is funded with will have to sign off on a final approval before closing. Automated pre-approval is good for conventional and jumbo type mortgages. Sub-prime loans will still have to be reveiwed by an underwriter since each sub-prime lender has its own group of loan products.
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