Today on this episode of #AskJulieC we are talking with Lizy Hoeffer Irvine, an expert in her field who is in the top 1% of lenders nationwide and runs the #1 female led team in the state of Arizona, to discuss the lending process.
What is the difference between a Pre-Qualification and a Pre-Approval?
Often clients interchange the words Pre-Qualification and Pre-Approval. However, the two have very different meanings. A Pre-Qualification means you have had a conversation with a loan officer and based on your conversation and credit report they believe that you would qualify for a home loan and they would set up terms and payments, etc. A Pre-Approval requires that all the financial documentation be reviewed and compared with the application and verify an average income, balance in accounts and is a more thorough analysis of the paperwork. It is still yet just a Pre-Approval as the approval process occurs when you are under contract and an underwriter verifies that it is insurable.
What are the advantages of an upfront Pre-Approval vs Pre-Qualification?
Buying a home is the second most stressful event in a person’s life and one of the ways to minimize that stress is by not having surprises. When someone comes into the office and we review paperwork to identify any questions an underwriter may have, we are preventing issues from happening from the get go. Not only does it make things less stressful, its can streamline the process, especially for those who do not have a printer or scanner at home to send updated bank statements or paycheck stubs once they are under contract. Having a preapproval appointment is the best way to set someone up for success by being able to set expectations, make copies and figure out what all the unknowns are ahead of time to make sure we have the happiest clients.
What does the timeline look like?
From the time, you receive the initial online application from potential clients, how long does it usually take to hear back from Lizy’s team? You will be contacted that day, we will get a needs list and once they have returned the needs list or had a Pre-Approval appointment its typically 24-48 hours. A Pre-Qualification you can get the same day. A Pre-Approval may take up to two to three days depending on how fast the client can return the information needed. It is super important that clients return the documents asap, that way they can get all the paperwork needed straight to underwriting.
Why does escrow take so long?
Escrow is typically 30-45 days. The first step once we are under contract is to send out initial loan disclosures. We are not only disclosing our fees, we are also disclosing estimated fees from the title loan company. Every loan must be disclosed within three days of receiving a contract, until those disclosures are signed there isn’t much else to be done, so that is the first milestone. After those have been signed we can order an appraisal, your title work, home owners insurance and verifications such as employment, social security and tax verifications. Once that information is received we can submit your loan into underwriting. There is also an inspection for appraisal that can take up to 10 business days and resubmission for final underwriting will be after a loan approval. There are 10-15 different people involved in the process from underwriters to title people, appraisers or clients that may have several questions. When you have so many people involved in the process it tends to take a while to get everything where it should be.
Thank you for tuning in to this episode of The #AskJulieC Real Estate Show. Do you have questions about relocating, and starting the process of buying a home? Message me on Facebook, I am pretty sure I am still the only Julie Calza on there and you don't have to be in Arizona for me to help you.