What Is the Difference Between a Standard Preapproval and an Underwritten Preapproval?

What Is the Difference Between a Standard Preapproval and an Underwritten Preapproval?
Sammamish Mortgage
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When you are getting ready to apply for a mortgage preapproval, you should realize there are two different kinds of preapproval. Where you are in the home shopping process will determine which kind you need.

Standard Preapproval

For a standard preapproval, you’ll do the following:

  • Fill out the loan application
  • Provide your loan officer with documentation to support all of the information in the application
  • Give your permission for a credit report to be pulled

The preapproval is completed by a loan officer (LO), an LO assistant, or a loan processor. They match your documentation to various line items in your application, pull your hard credit report, and in general look for any red flags. If everything matches and can be verified, you receive your preapproval letter.

Underwritten Preapproval

For an underwritten preapproval, you go through the full underwriting process. This is usually done once you have found a home and want to make an offer. However, you may want to complete underwriting ahead of time as an extra step to bolster your preapproval.

Your entire file except property related items such as the appraisal and title policy will be reviewed by an actual underwriter. This process requires more time and effort upfront, but it ensures a faster and smoother loan finalization process when you find the home of your dreams.

Once you have an underwriting approval, the only things left to approve before finalizing the loan and moving to closing are the appraisal, title, and insurance. Once you finish the last few steps, assuming there are no problems with the house and title and you acquire the necessary insurance, your home purchase can be completed.

Which Preapproval Should I Get

Generally, if you are just starting house hunting or if you’re buying in a non-competitive market a standard approval is all you need. Once you find a home you want to put an offer on, you simply ask for your file to be sent to underwriting. If you’ve already found a home you want to buy, going straight to the underwriting process is advised.

If you are looking to purchase a home in a competitive market (which is more likely to result in a bidding war) a fully underwritten preapproval can help your offer come out on top. Sellers will view an offer with an underwritten preapproval as better than an offer with a standard preapproval since the chance of financing falling through after a borrower goes through underwriting is extremely low.

Sellers also like the fact that an underwritten preapproval allows for a quicker closing, since you’ve already gone through the majority of the process prior to making an offer. This can be helpful if you, the seller, or both are on a tight timeline.

Another reason to go through underwriting prior to making an offer (regardless of the market) is if your financial situation is unique. After reviewing your financial situation, a good Loan Officer should advise you whether this step is needed or not. If there are issues, you’ll find out sooner rather than later. If not, you’ve gotten your home loan mostly approved before you even start looking.

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Are you ready to get preapproved for a mortgage? Don’t be intimidated by the steps required. We can help make the process as easy and stress-free as possible. Get preapproved today!

Sammamish Mortgage has been in business since 1992, and has assisted many home buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon and Washington.

Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.

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