The Pre-Approval Process Can Be Tricky

The Pre-Approval Process Can Be Tricky?

By, Steve Meyers, Associate Broker

Keller Williams Greater Seattle


In the current mortgage market, getting Pre-Approved for a loan is much more difficult than it was six months ago.  This is good for the financial markets, lenders and secondary mortgage market but, it can be burdensome and time consuming for the borrower.  Long past are the days of gaining Pre-Approvals in 24 hours.  Today, it’ll take between 3  to 10 days, depending on the complexity of your financial situation.

If your employment has been stable for the last 2 years and your financial accounts can be properly verified without significant issues, you should be able to gain Pre-Approval for a mortgage loan within 3 days.  But, your application must be squeaky clean and you need to follow all of the guidelines of your lender throughout the process, up until the loan is funded.  Here are some of the things to be careful of regarding your employment:

a.)    You should be employed full time, for the last two years, with the same employer.

b.)    Attempting to qualify for a loan following a very recent raise in salary/income.

c.)     Being self-employed for less than two years.

d.)    Declining income from a reduction in hours or as a self-employed person.

e.)    Submitting a pay stub that doesn’t have your name, address, or year to date income.

Your application for a loan must be complete and accurate.  First, the income reported on your application must match that reported to the IRS, it must match your pay-stubs, and it must match the income that the employer verifies when contacted by the lender.  Second, the bank account where you’ll be withdrawing your down payment will be monitored from the moment you apply for the loan until the loan is funded. Third, your credit status must be consistent from the moment you apply for the loan until it is funded:

a.)    Inquires into your credit by third parties, applying for a new credit card, or obtaining any new debt will raise a red flag with the lender.

b.)    Any late mortgage payments, credit card payments, failure to pay all fines, etc. will raise a red flag with the lender.

c.)     You must disclose all debt or litigation for alimony, child support or for other situations to your lender when you apply for a loan. 

d.)    Any deposit into a bank account over $250 following application should be documented and explained to the lender.   This would exclude your normal employment pay deposit.

e.)    Don’t’ transfer money between asset accounts without proper documentation and only if it’s necessary.

f.)     Bank statements, brokerage statements, IRA statements, etc., must include all of the pages of the statement.

There are lots’ of other “Do’s and Don’ts” to gain Pre-Approval for a Mortgage Loan and to reach closing and funding without headaches.  Each lender will have some of their own criteria but remember, most of these changes are dictated by the federal government and federal agencies.  Your lender must follow all these rules and regulations.  Think of mortgage lending as constantly changing.  The process is fluid and communication with your lender during the process is the key to success.

Do not rely on the information in this article when applying for a loan.  Each individual lender will provide you with the requirements you must follow and guide you through the process.

Information for this article was provided, in part, by Ms. Gail Bean, MetLife Home Loans, Seattle, Washington.  To contact her for your lending needs please email her at or contact her at (206) 691-2928.

Steve Meyers

Keller Williams Realty

(206) 972-3328


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