I just got my pre-approval letter in the mail. What do these requirements mean?

[Anonymous]

I just received my pre-approval letter in the mail from my bank.  I need help figuring out what to do next. Here are the requirements that need to be made before we search for a home. Full explanation would be wonderful and kindly appreciated.

P.S. A few notes to make. My monthly income is a little less than what they put on the letter. Will that matter? Also, one of the reasons I got declined at another bank was because of rental verification. Should I make that clear in my explanation letter? Thank you.


Loan conditions and requirements

Your Responsibilities:

These items are needed to complete your loan application

-Written explanation of any mortgage inquiries within the past 90 days, signed and dated by all borrowers. If you were declined for an FHA application, provide copy of original lender's worksheet with explanatory comments.

-Written explanation for all credit inquiries made within the last 90 days and provide any new debt payments resulting from inquiries. Explanation must be signed and dated by all borrowers.

-Most recent pay stub covering a 30 day period and W-2 form for the most recent 2 years to document monthly income of $3,166 for (insert name), supported by year-to-date earnings.

-Account statements for the most recent 1 month for all depository assets disclosed on your Application. All pages must be included. Any non-customary deposits must be explained and documented.

-Agreement of Sale and all addenda for the subject property to document sales price of (insert price). Document must include all pages and be signed/initialed/dated by all parties to the transaction.

[tammyjk]

P.S. A few notes to make. My monthly income is a little less than what they put on the letter. Will that matter? Also, one of the reasons I got declined at another bank was because of rental verification. Should I make that clear in my explanation letter? Thank you.

Whats a little less?  Most likely any lender will ask for rental verification, but that may depend on credit score too.  I know my LO said above 640 I shouldnt have to worry about it.    Where you just a few months short on reciepts, bank statements ect.? 

It is just my experience and I am just starting on this journey, but I was very frank with my LO about everything.  The best thing to do at this point is to give your LO a call and discuss everything with them.  You realy do not want to get in the middle of the process just to be shot down again. 

[Anonymous]

My husband has had 4 or 5 pre-approvals from Wells Fargo due to employment changes, overtime income, making offers on houses, etc. & on every single one, the required income on the letter was more than he makes. If he was making $3500/mo, they required $3800, if he was making $3000, they wanted $3400, $5800 they wanted $6200.  I have no idea why they do this since they have our paycheck stubs & can clearly see the income. But to me it seems like it might be something generated by the computer based on DTI.  My loan officer said not to worry about it, but it's a little hard when it says that's what they require & there is no way you can produce it.

As for your requirements....they are asking, in writing, that you explained any mortgage inquiries. I.E. if you applied for a mortgage pre-approval or loan with any other company. You'll have to look on your credit report & see what's on there & explain it. Including their own inquiry. Stupid huh? They want you to explain any credit inquiry period. So basically get a copy of your credit report & explain why anybody has hard pulled your credit.

Paycheck stubs...self explanatory.

Bank account statements showing you have the money you say you have & written explanations for any large deposits (usually over $200).

Sales contract for your dream home! This isn't needed until you find your home & get under contract.

These are all very common & easy stipulations. Breath easy my friend!