Seller & Buyer Tips January 15, 2024

The Benefits of Full Underwriting Approval vs. Prequalification

The Benefits of Full Underwriting Approval vs. Prequalification written by my friend Branch Manager and Loan officer with Union Home Mortgage, April Bynum.


When it comes to obtaining a mortgage, being fully approved through underwriting offers significant advantages over prequalification. Let’s dive into the differences between the two processes.


Pre Approval is an initial assessment of your financial information. The loan originator verifies your income and uses their experience to determine if the mortgage is financeable. However, it’s important to note that when you’re under contract for a new home, the mortgage will still need to be approved by a mortgage underwriter.


On the other hand, underwriting approval is a more thorough and rigorous process. It involves a comprehensive review of your income, assets, debts, credit history, and other relevant documents. Underwriting approval confirms that you meet all the necessary requirements for obtaining a mortgage. This stage provides a more accurate assessment of your financial situation and increases your chances of securing financing.


Now, let’s explore the benefits of full underwriting approval:


  1. Increased Confidence: Full underwriting approval instills confidence in both you and potential sellers. It shows that your financial information has been thoroughly reviewed, making you a stronger candidate in the eyes of sellers.


  1. Accurate Assessment: Underwriting involves a comprehensive analysis of your financial history and documentation. This ensures an accurate assessment of your financial situation compared to prequalification, which may only be based on self-reported information. With underwriting approval, you can make informed decisions about your budget and avoid any surprises down the line.


  1. Faster Closing Process: Full underwriting approval speeds up the closing process as most of the necessary documentation has already been reviewed. This reduces delays or last-minute requests for additional information and allows for a smoother transaction.


  1. Competitive Advantage: In competitive real estate markets, having full underwriting approval gives you a significant advantage over other buyers who have only gone through prequalification. Sellers are more likely to choose a buyer who has already secured financing, reducing the risk of the deal falling through due to financing issues.


  1. Negotiating Power: Being fully approved through underwriting gives you stronger negotiating power when it comes to the terms of your mortgage. Sellers may be more willing to accommodate your requests, such as a lower purchase price or favorable closing dates, knowing that you have already secured financing.


In conclusion, while pre qualification provides an initial assessment, full underwriting approval offers numerous benefits. From increased confidence to a faster closing process and stronger negotiating power, choosing underwriting is a smart move in the mortgage process. It ensures a thorough evaluation of your financial situation and positions you as a more attractive candidate in the home buying process. For more details of the Benefits of Full Underwriting Approval vs. Prequalification call to get answers to any questions you may have on the home buying and prequalification process.

April Bynum -Branch Manager,  Cell: 810.407.1444

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Crystal Zabel Your Crystal Clear Realtor


Crystal Zabel, Realtor
“Your Crystal Clear Realtor”
Coldwell Banker Professionals
67395 Main Street
Richmond, MI 48062
586-727-2741 – Office
810-683-4560 – Cell
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