topic Re: Questions about pre-approval conditions in Mortgage Loans

Questions about pre-approval conditions

Anonymous — Sat, 07 Jul 2012 00:37:38 GMT

Good Evening!

Today I received my pre-approval letter in the mail from Wells Fargo. Getting pre-approved was unexpected with some credit issues and a mid score of 602, but nonetheless, I was pre-approved. However, there was a laundry list of conditions that need to be met (expected). I have a couple questions regarding some of the conditions.

Condition 1:

Lender is to receive a fully executed gift letter from an acceptable donor in the amount of $4200. (I wasn't planning to use a gift for funding. Is this still mandatory?)

Condition 2:

Lender is to receive most recent paystub of borrower reflecting monthly income of at least $2958. (Can overtime pay be included as qualifying/acceptable income? I'm very close to that in just base salary and overtime is steady. I'm averaging at least 10 hours a week.)

Condition 3:

Lender is to receive W2s of borrower from years 2010 and 2011 reflecting monthly income of at least $2958. (I did not make that amount at my last job. Will this be a problem even though I'm making more money now than at my last job? There was no gap in employment for the last six years.)

Condition 4:

This one I'm most confused about, since I was pre-approved for $73,565. Lender is to receive fully executed purchase agreement, including all addendums, with a minimum sales price of $75,000. All terms must be acceptable to the lender. (Why are they asking for a minimum purchase price that's over my pre-approval amount?)

Condition 5:

Lender is to receive an acceptable appraisal report indicating a market value of $75,000. All terms must be acceptable to the lender. (Is this saying that no matter the cost of the house, it must only appraise at $75,000 or is this just an extension of the previous condition?)

Sorry for the long-winded post. I'm a first-time home buyer and I want to make sure I'm doing everything right. My realtor is looking into this for me and I left a voicemail for the loan originator's supervisor since the LO is on vacation until the 16th. I knew I wouldn't receive a call back right away, let alone at all on a Friday afternoon, so I figured I'd come here for advice as have on numerous other occasions.

Any help or insight you can provide is greatly appreciated, as always!

Re: Questions about pre-approval conditions

StartingOver10 — Sat, 07 Jul 2012 21:07:40 GMT

How did you apply for the PQ?

Was it a phone app?

I am asking because the approval seems to be asking for docs you generally supply at the time of application (W-2's for 2010 and 2011; paystubs not to mention tax returns that that isn't shown on your short list below).

Did you already provide bank statements showing you have the cash required for your down payment and closing costs?

Re: Questions about pre-approval conditions

Anonymous — Sat, 07 Jul 2012 21:25:16 GMT

Yep, it was a phone app. I have a checking and savings account with WF so they're already aware of what's in my accounts, and it is more than enough to cover the DP. They are asking for my tax return for the past year as well but I figured that's just standard anyway.

Re: Questions about pre-approval conditions

Tallpap — Sat, 07 Jul 2012 22:06:31 GMT

whats your annual income?

Re: Questions about pre-approval conditions

Anonymous — Sat, 07 Jul 2012 22:09:39 GMT

$35,505

Re: Questions about pre-approval conditions

Anonymous — Sat, 07 Jul 2012 22:10:11 GMT

That's not including overtime.

Re: Questions about pre-approval conditions

scmami — Sun, 08 Jul 2012 00:17:21 GMT

Lol....when StartingOver10 asked if OP applied via a phone app I immediately was thinking iPhone/Android app....I was thinking "There's an app for THAT?!" I work in wireless so these things are always on the brain....sigh.....carry on....

Re: Questions about pre-approval conditions

StartingOver10 — Sun, 08 Jul 2012 00:58:42 GMT

@scmami wrote:
Lol....when StartingOver10 asked if OP applied via a phone app I immediately was thinking iPhone/Android app....I was thinking "There's an app for THAT?!" I work in wireless so these things are always on the brain....sigh.....carry on....

lol....got my laugh for tonight!

Re: Questions about pre-approval conditions

Anonymous — Sun, 08 Jul 2012 01:09:05 GMT

LOL

Re: Questions about pre-approval conditions

StartingOver10 — Sun, 08 Jul 2012 01:09:10 GMT

Not all income is allowed. Your overtime income may be used under certain conditions having to do with how long you have been getting overtime and how long you are going to continue to receive it.

The WF rep can't go into your bank account without your express permission to do so.

Seriously, based on the way Wells Fargo has been failing to close lately, if I were in your shoes, I would make an application with a good mortgage banker in your area. Have all of your documentation so you get a real pre-approval. It will save you lots of time, effort, money and heartache. Wells Fargo is the classic case (at the moment) of over promising and under delivering. I am basing this comment on the large percentage of Wells Fargo PQ's that never close in our area (S Fl). I'm a Realtor and lately WF is having pretty severe issues. It may be different in your area, YMMV. But a pretty good indicator is that the LO issued your PQ before he had your documentation which is not helpful to you.

@Anonymous wrote:
That's not including overtime.

Re: Questions about pre-approval conditions

Anonymous — Sun, 08 Jul 2012 01:20:54 GMT

Makes sense. My app did go through underwriting, though, if that makes much of a difference. Good thing is that we're not in a hurry to buy and can wait another year to save some more money. I will, however, try with a mortgage banker. It's within the 30-45 day period where I can hopefully avoid a credit score impact. Forgive my ignorance, but what is the difference between a mortgage lender and a mortgage banker? Are there any nationally known mortgage bankers (as in companies) that may have locations throughout the US?

Thanks for all the help so far!

Re: Questions about pre-approval conditions

StartingOver10 — Sun, 08 Jul 2012 01:34:04 GMT

A mortgage banker funds their own loans. They have their own underwriting departments. You end up closing with them and then they sell the loan after you close. Naturally the terms and conditions can't change when it's sold. The benefit is that they have many different programs and they can broker the loan if they don't have the best program for you. I have found that the LO's at mortgage bankers are more experienced, so when they take your application you and they have a better sense of what you actually qualify for with all the criteria, not just bits and pieces.

The disadvantage of a direct lender is they have a more narrow band of qualifying criteria - the mortgage banker has more resources to shop your loan.

Ask your Realtor who they recommend. Interview the lender. A good lender/mortgage banker makes a world of difference in the entire process.

Re: Questions about pre-approval conditions

Anonymous — Sun, 08 Jul 2012 01:45:02 GMT

Sounds like I will be reaching out to a mortgage banker next week. I'm sure I will have to provide the same information to them as what WF wants but if it makes it more smooth, and more clear, it's worth it.