What Is Upfront Underwriting? The Upfront Approval Guarantee

By Amanda Bailey
8 min read

What Is Upfront Underwriting? The Upfront Approval Guarantee

If you’re asking yourself if guaranteed mortgage approval is for you, here’s what you need to know. This article will break down the difference between upfront underwriting and a standard pre-approval.

Key Takeaways

  • A guaranteed mortgage approval is upfront underwriting. It has the potential to make your offer more attractive in a competitive market.
  • A guaranteed mortgage approval also gives buyers more confidence and streamlines the process, allowing you to close faster and potentially make better offers.
  • Various guaranteed loan options exist (FHA, VA, USDA, etc.) for different financial situations and buyer needs.

What is a Guaranteed Mortgage Approval?

A guaranteed mortgage approval is essentially upfront underwriting, it’s a mortgage pre-approval on steroids. A regular mortgage pre-approval is a surface level look and ballpark figure on what you MAY be qualified for. A guaranteed mortgage approval is actually a fully-underwritten mortgage that just needs the final touches. In other words, guaranteed mortgage approval is just as good as having the money in your pocket, not just a promise of money. Sellers know you’ve been approved to buy a home, not just pre-approved.

In today’s hot markets, upfront underwriting on your pre-approval can strengthen your offer. It shows that your financing is in order. This can be a big differentiator if there are other bidders who still have some financial loose ends to tie up. It allows you to move with certainty when you find your dream home.

It also makes the entire home buying process easier. A guaranteed home approval makes closings faster. Sellers love guaranteed home approval offers because they reduce the risk of a deal falling through at the last minute. And who doesn’t want a smooth transaction that closes on time?

Benefits of Guaranteed Mortgage Approval

There are many benefits to guaranteed mortgage approval. The biggest one is that it leaves home buyers feeling confident. When you know your financing is approved, you can make an offer without worrying about whether you’ll get approved. And that peace of mind is invaluable. When you’re in a multi-offer situation and you hesitate, you’re likely to lose the home of your dreams.

Further, the Upfront Approval Guarantee program will greatly simplify the home buying process. It reduces paperwork down the road and can get you to closing in as little as 10 days. This is incredibly fast compared to the rest of the industry. And not only will it save you time and hassle, but it will give you an upper hand in the market that could make all the difference.

Finally, having a guaranteed mortgage approval gives you some serious momentum when making offers. You’ll know exactly how much you can afford to spend and can make more aggressive offers that are difficult for sellers to refuse. You are essentially making a cash offer, which is the most attractive offer in today’s market.

What is The Upfront Approval Guarantee?

The Upfront Approval Guarantee is the Moreira Team’s upfront underwriting process. The process of getting a guaranteed mortgage approval begins when you fill out the online application, attaching your supporting financial documentation. This step is absolutely necessary because it starts the underwriting process. Underwriters review the documents you’ve submitted to ensure that you have all the necessary information for full approval.

You should also work with a loan officer to make this process as easy as possible. Once your application has been fully underwritten, you will have a guaranteed mortgage pre-approval in place, which will allow you to start looking at homes right away and potentially close in as few as 10 days.

What is Upfront Underwriting?

Upfront underwriting is the backbone of the guaranteed pre-approval process. It’s when a financial expert reviews your income, assets, and creditworthiness. They will then determine how risky (or non-risky) you are as a borrower. The more comprehensive the upfront underwriting, the more accurately the lender can assess whether you can afford to make the mortgage payments.

Getting to Know You

The good news is that housing finance companies will give you a full assessment up front. This process will grant you conditional approval and a clear picture of your loan-ability and affordability. In most cases, this approval is valid for 120 days and will give you the freedom to shop for a house with confidence. No more wondering if you’ll qualify or hoping for the best!

Catching Problems Before They Start

Identifying and addressing potential issues early in the mortgage process is essential for a successful home buying experience. It will help you avoid all those annoying delays and headaches later on.

A good rule of thumb is to start the home buying process six months to a year before you want to purchase. This allows you to get your finances in order and address any issues before you even find your dream home. This will give you a much higher chance of getting through the mortgage process without any hiccups.

What Types of Home Loans Can You Use Upfront Underwriting With?

There are several types of home loans, each with a third party (usually Uncle Sam) behind it to make the process more accessible to the average person. The three major types of home loans are FHA loans, VA loans, and USDA loans.

Conventional Loans

Another popular option for home buyers are conventional loans. These loans are not insured or guaranteed by the government and generally require a higher credit score than guaranteed loans. Borrowers with excellent credit and a stable income qualify for the best rates and terms available, including lower interest rates and fewer fees.

Conventional loans require a minimum down payment of 3% to 5%, making them accessible to many buyers. There are also numerous conventional programs for both first-time and repeat buyers, giving you flexibility to choose one that fits your unique financial situation.

FHA Loans

FHA loans are a godsend for many first time home buyers. For a 3.5% down payment, the minimum credit score is 580. However, most lenders will want a score of 620 or higher to qualify. There are two types of insurance premiums. The first is a 1.75% upfront premium of the loan amount. The second is an annual premium, which can range from 0.15% to 0.75%. This is paid monthly.

While there are additional costs, FHA loans are designed to help low-to-moderate income buyers achieve the dream of homeownership. Even if you don’t have a long credit history or a lot of money saved up, you can get into a home.

VA Loans

VA loans only apply to qualified veterans and active-duty service members. They are a zero-down payment loan. These loans are a benefit offered by our country to service members. They make it easier to buy a home and more affordable.

No down payment and lower interest rates make VA loans a great option for those who have served our country. These financial advantages can give buyers a significant leg up on the competition.

USDA Loans

USDA loans are intended to help low- and moderate-income buyers purchase homes in rural areas. They require a fee at closing and an annual fee based on the loan amount, which is typically paid by the buyer.

The main benefit of USDA loans is that they focus on rural development. If you qualify and are looking to buy in one of the many designated rural areas, these are a great option for first time home buyers.

Is a Guaranteed Mortgage Approval Right for You?

The best way to determine if upfront underwriting is right for you is to run a home buying assessment. This will give you an overall picture of your financial situation, help you set realistic goals, and let you know if this approach is within your budget and timeline.

Check your credit score. This is a no-brainer. The higher your score, the better your loan terms will be. Moreover, the more likely you’ll be guaranteed approval. FHA loans have the highest credit score and down payment requirements, but are ideal for first time home buyers who are new to the game.

How to Start the Upfront Underwriting Process

It’s easy to get the Upfront Approval Guarantee process started. First, connect with a loan officer and complete an online application. This is one thing you must do if you want your application to stand out in today’s competitive real estate market.

Once you have all your financial information in order, you can make your way through the approval process. From there, you’ll be on your way to a fully underwritten pre-approval and making offers on homes with confidence!

Summary

In general, upfront underwriting using our Upfront Approval Guarantee process offers a wide range of benefits that can greatly improve your home buying experience. From the confidence boost that comes with it to the extra leverage your offers have, a guaranteed approval is a very valuable tool in today’s tight housing market.

As you prepare to buy a house, keep in mind that having a completely underwritten approval on your side will make all the difference. Take the steps to get a guaranteed mortgage pre-approval and go into your house hunt with confidence.

Frequently Asked Questions

What is the difference between regular pre-approval and guaranteed mortgage pre-approval?

Guaranteed pre-approval means that your mortgage is completely underwritten and just needs a few final details to be complete, while regular pre-approval is more of a quick check of your financials. So if you’re serious about buying, go for the guaranteed option!

How does guaranteed mortgage approval benefit me in a competitive market?

Guaranteed mortgage approval benefits you in a competitive market because it establishes your credibility with the seller. Cash is always king, but a guaranteed approval is the next best thing. It gives you an edge over other buyers.

What are the main types of home loans available?

The most common types of guaranteed home loans are FHA, VA, and USDA loans. Each has their own set of benefits and qualifications and you can pick the one that works best for you.

What are the steps to take to get started with upfront underwriting?

The steps to take to get started with a guaranteed mortgage approval are easy. Simply contact a loan officer and fill out an online application while gathering your financial documentation and information. Then you’re off and running!

Is upfront underwriting a good option for first time home buyers?

Yes! A guaranteed mortgage approval is a good option for first time home buyers. It can give them that extra boost of confidence in their ability to get a home, and make their offers more attractive to sellers.