What We Need for a Rock-Solid Loan Pre-Approval (And Why It Matters)

As a loan officer, I’m your partner in accepting those offers, but let’s talk about what it takes to get a pre-approval that holds up under scrutiny. I had a client yesterday who came to me with a “pre-approval” from another lender. Sounds promising, right? Except they hadn’t provided a shred of income documentation and their credit? Never checked. They wanted us to rush a pre-approval to make their offer stronger as it was a multiple-offer situation, and the listing agent loves and trusts me. I was ready to roll, but they pushed back when we asked for the basics: “The other lender didn’t need any of this!” Cue the eye rolls. Agents, you know a flimsy pre-approval can tank a deal faster than a lowball offer. So, let’s break down what we need for a legit pre-approval, why we need it, and why some lenders are handing out letters like they’re passing out flyers at a car wash.

The Essentials: What We Need for (Almost) Every Loan File

We need the following to get your buyers a pre-approval that’ll make listing agents swoon. Each piece serves a purpose, and it’s all about ensuring the deal doesn’t fall apart in underwriting.

• Driver’s License: No, we’re not playing DMV. This ensures we’re pulling credit for the right person. A name mix-up can cause us to re-run the credit, and if the score is worse, it could affect the loan!
• Social Security Card: Not a must, but it’s a big help. We want the exact Social Security number to avoid any errors.
• Pay Stubs (Last 30 Days): These confirm your buyer’s income is steady, matching last year’s numbers or better.
• W-2s or Tax Returns (Last 2 Years): W-2s show job stability for employed buyers. Self-employed? Tax returns do the same, and oftentimes, we only need to use one year of taxes or W-2s!
• Bank Statements (Last 2 Months): We’re verifying the down payment and checking if the seller needs to cover closing costs. Cash deposits or big withdrawals? We’ll need answers.
• Insurance Declaration Page (if they own a home): This confirms their current home’s insurance details. It’s not just paperwork - it’s accuracy. It also allows us to contact their agent if we need something.
• Mortgage Statement (if applicable): Current mortgage payments might not show correctly on credit reports. We need the real numbers to properly calculate their debt ratio or cash out after sale.
• HOA Statement or Solar Leases can sneak into debt-to-income ratios and derail qualifying. It’s better to know upfront.

When Things Get Tricky: Non-Standard Files

Some buyers aren’t straight-out-of-the-box, and that’s where we earn our keep. If your buyer’s income includes overtime, commissions, or bonuses, we’ll need final pay stubs for the last two years to prove the income is consistent. Got a business owner? We need business tax returns. If they’re using business funds for the down payment, we’ll need a CPA letter stating it won’t sink their company. For bank-statement loans, we swap W-2s and pay stubs for 12 months of bank statements to verify income. The pre-approval isn’t a quick coffee-and-chat process - it’s a deep dive to ensure your buyer’s offer is ironclad.

The “Other Lenders” Problem (Yeah, We’re Going There)

Here’s where I get a bit snarky. Some lenders - let’s call them “Speedy McSpeedface” - churn out pre-approvals without asking for a single document. No credit pull, no pay stubs, nada. It’s like giving a buyer a blank check and hoping it doesn’t bounce. When we ask for actual paperwork, we’re the bad guys. “Why are you making this so hard?” the buyer groans. Because, agents, we’re trying to save your deal from crashing when the underwriter asks, “Where’s the proof?”

Real-world example: We recently spotted a $2,200 monthly deduction on a buyer’s bank statement, paid to some woman on both bank statements the buyer provided. Day one, we asked, “What’s this?” Answer: voluntary child support, not on the credit report. That could’ve blown their debt-to-income ratio if the underwriter saw it. Our fix? “Pay with a cashier’s check for a few months, then resume checks after closing.” Crisis averted. Without those bank statements upfront, we’d have been scrambling. Worse, if the buyer needed a gift from Mom to avoid showing the bank statements for the down payment and Mom’s cash was tied up, we could’ve arranged a Flex Bridge loan - a second mortgage on Mom’s house for, say, $150K. But guess what? Most “speedy” lenders don’t offer creative solutions like that. They pray the file slips through.

Why We’re Sticklers (And Why You’ll Thank Us)

A rock-solid pre-approval isn’t just a letter - it’s a guarantee we can take your buyer from offer to closing, assuming the property appraises and the title’s clean. Some files take 15 minutes to review; others take 15 hours. I’ve had buyers where a quick chat, a pay stub, and a credit pull tell me they’re golden - and I’m batting 1.000 on those calls. But I still won’t write a letter without at least a pay stub. Why? Because I’d rather be the “annoying” loan officer upfront than the one explaining why the deal fell apart at the 11th hour.

Yes, some buyers get grumpy when we ask for more than the other guy. But when we catch issues - like that child support payment - on day one, we can fix them before they jeopardize the sale. Those “Rocket-Speed” lenders? Their pre-approvals are about as reliable as a paper towel in a hurricane.

The Bottom Line for You, Agents

You want your buyers’ offers to stand out, and a pre-approval from us is like a suit of armor. We ask for all this paperwork because we’re building a file that’ll survive underwriting’s microscope. Once your buyer’s pre-approved, we’re 100% confident, and we’ll usually only need updated pay stubs and bank statements when they find their dream home. So, when another lender hands your buyer a pre-approval without asking for a single document, warn them: it’s not a golden ticket - it’s a gamble. Stick with us, and we’ll make sure your buyers are ready to win the deal, not just make an offer. Now, let’s close some escrows together,

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Another story of how the roller coaster is going! Today, we have rates much better than yesterday, and we are at the same level we were when the market closed last Friday! So, three bad days, and then boom, one good day wipes out the three bad ones. We need about 40 more days like today, and business will boom!

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the mid 6s.
• High Balance Loans from $806,501 to $1,209,750 are also in the 6’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s ++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No Ratio Loans require 30% down.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:** – Nothing new!

**Bad News for Condos***

Nothing this week!  

The full state of California naughty list has been added to MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

Have a great day, and an even better tomorrow! Please call me when you have a client who needs to borrow!