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What do Your Borrowers Need to Pre-qualify Us for Our New Home Purchase?

Orion’s brokers are usually seasoned vets when it comes to knowing what is required to approve a loan. But occasionally we like to provide a reminder that there are three primary components of information needed to be pre-qualified or pre-approved for a home loan: money, credit and income. 

Let’s look at the first component. How much money does your client have for down payment and closing costs? Is all the money their money and in their bank account right now? Is the borrower receiving a gift from a family member to cover some, or all, of the funds needed? Copies of recent bank statements, investment accounts and retirement account statements will be used to verify how much money your client will have for their purchase. 

The credit category covers not only current outstanding credit obligations, such as auto loans, student loans and credit cards, but also, if there is any spousal or child support payments or other court ordered payments. Lenders, Orion included, need to verify how much is owed, how much must be paid on a monthly basis, and your client’s history of making payments. Orion’s brokers know that the credit report (which will not show spousal or child support payments) lists all these items. This information helps us arrive at an accurate pre-qualification for how much of a house can be purchased. 

The third component is income. How is your client paid? Are they self-employed? Do they have investment property or multiple streams of income? How long has your client been receiving income from its current source? Is there overtime or bonuses? Most people are salaried employees receive a W2 at the end of the year so with recent paystubs and the most recent W2, Orion’s underwriters can quickly calculate income. If this is not the case, any lender will want to see, at minimum, the most recent federal income tax return that has been filed, and very likely returns for the past two years. 

With the information from the 3 components we can usually pre-qualify or pre-approve a borrower within a few minutes for a sales price and mortgage amount. If the income is a bit more, the process may take a bit more time and information.Let’s look at the first component. How much money does your client have for down payment and closing costs? Is all the money their money and in their bank account right now? Is the borrower receiving a gift from a family member to cover some, or all, of the funds needed? Copies of recent bank statements, investment accounts and retirement account statements will be used to verify how much money your client will have for their purchase.


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