Did you know that before you even start looking for a home to purchase, you can get pre-approved for a loan?
Many borrowers start the home search before they apply for a loan. But if you get pre-approved first, you can put yourself ahead of the buying competition.
What's in this article?
Want to get even farther ahead? Compass Mortgage offers Get Committed®, an exclusive program leading to a mortgage commitment, which holds the same power to sellers as a cash offer.
Read on to learn the difference between standard pre-approval and Get Committed®, plus the ins and outs of the loan commitment process.
What is Get Committed®?
Get Committed® is a mortgage commitment which confirms that a borrower is fully approved for a loan.
Not all lenders provide borrowers with a mortgage commitment once they are pre-approved. Most lenders only offer standard pre-approvals.
A Get Committed® mortgage commitment from Compass Mortgage is much more than a standard pre-approval—it means you can confidently tell the seller you’re fully approved financially. The only conditions left to clear are for the property that you want to purchase.
A standard pre-approval does not offer this level of confidence to sellers because it’s not uncommon for a deal to fall through if the buyer only has provisional approval for a loan
You will receive your mortgage commitment after you complete Compass Mortgage’s requirements for Get Committed®.
This means you have gone much farther than mere pre-approval with a loan officer and that you have submitted all necessary documentation for the loan, aside from the appraisal.
Ready To Take Your Next Step?
Will I get a mortgage commitment in writing?
Your loan officer will issue your mortgage commitment in the form of a letter.
The commitment letter generally includes your loan amount, loan type and terms, approval confirmation and the expiration dates for the interest rate lock and commitment.
The letter proves to sellers that you have financing secured and can close and purchase the home in a quick time frame.
Armed with a mortgage commitment letter, your offer will stand out from standard pre-approvals because the letter proves you have the money to make the purchase.
Mortgage commitment vs. pre-approval: Do I need a pre-approval letter if I have a mortgage commitment?
You have to apply for a loan and complete the application process to acquire either pre-approval or a mortgage commitment.
Some mortgage professionals use the terms pre-approval and mortgage commitment interchangeably, but they don’t mean the same thing.
A standard pre-approval is generally a conditional commitment, which doesn’t hold the same weight as a firm mortgage commitment.
Standard pre-approval is dependent on several remaining conditions—mostly centered on the borrower’s financial standing and requirements.
A Get Committed® mortgage commitment, on the other hand, has cleared most of the conditions and can confidently state that the lender will loan you the money.
Get Committed® is as close as you can get to final approval with the elimination of all but a few remaining steps, such as an up-to-date appraisal of the home you wish to buy. Having this commitment, however, removes the need for a separate pre-approval.
How long does a mortgage commitment take?
The time it takes to move through the process of pre-approval and loan commitment depends in large part on the availability, timely delivery and accuracy of the necessary documents your loan officer requests from you.
To help the process move along as smoothly and quickly as possible, make sure you understand exactly what your loan officer needs from you, then get the documents to that loan officer as soon as possible.
General requirements include:
- Good credit score
- Income documentation
- Employment verification and history
- Down payment amount
- Debt-to-income ratio (DTI) as determined by the conditions of your loan
Your lender will verify all your documentation, run a full credit check and calculate your DTI.
If they need more documentation, they will reach out to you. Make sure you reply as soon as possible to avoid any delays.
Once pre-approved, we will confirm that. If you’ve taken the extra steps needed for a loan commitment and met the requirements, we will confirm that as well.
Get Committed® is a unique program offered by Compass Mortgage that allows borrowers to go through most of the steps in the loan process to secure a mortgage commitment before they even make an offer on a home.
With Get Committed®, you can resolve any financial requirements before you reach the closing process, thereby shortening the closing time to as little as 15 days.
What happens after I get a mortgage commitment?
Once you have your Get Committed® mortgage commitment letter in hand, your real estate agent can include it in any home offers you make.
You might have heard that mortgage pre-approval helps your home offer stand out from other offers.
A mortgage commitment will put your offer above those with just a pre-approval, because it goes a step further in proving to the seller that you are as close to approval as possible and can close faster.
The most appealing offer to a seller usually is a cash offer, because the buyer has the cash on hand and doesn’t even need a loan.
Mortgage commitments compete with cash offers, too, because they prove to the seller that you do have the money right now to make the purchase.
Mortgage commitment vs. clear to close: Whats the difference?
A mortgage commitment is a positive step toward closing, but it doesn’t equal full approval.
Before your lender can clear you to close, they will have to confirm that all conditions have been met successfully, including the property appraisal and all financial documentation.
Additionally, there are several obstacles that can happen before closing day whether you have a cash offer, a pre-approval letter or anything in between.
For example, a cash-offer buyer could have an emergency that requires a significant amount of funds, or a borrower could make a large purchase that affects their down payment amount.
Mortgage professionals point out this list of mistakes to avoid between pre-approval and closing because they can affect your final approval:
- Applying for new credit or taking out another loan
- Changing jobs
- Making large purchases
- Making late payments
- Changing bank accounts
- Making large bank deposits or withdrawals
The possibility of these financial changes means that your lender isn’t going to clear you to close until they reevaluate your situation once again prior to closing. The collapse of a purchase due to one or more of these changes is a greater possibility with pre-approval than with a loan commitment.
If anything has changed significantly you may not receive final approval, and you would have to move through the process again based on your updated financial situation.
If there are no changes, you can move ahead to close!
How do I get a Get Committed® mortgage commitment?
The first step in getting a mortgage commitment is to apply with one of our experienced loan officers at Compass Mortgage.
Get Committed® provides a fully underwritten mortgage commitment and locks in your interest rate before you even find the property you want to buy.
A Get Committed® mortgage commitment has the power of a cash offer, proving to the seller you are fully approved financially and that your deal isn’t likely to fall through.
Remember, with standard pre-approvals, you haven’t secured a loan yet.
With Compass Mortgage’s Get Committed® program, you’ll go through most of the steps in the loan process to secure a loan commitment before you even make an offer on a home.
Apply today with Compass Mortgage so we can discuss the loan options available to you. Our team treats you like family and promises to be with you through every step.
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