Mortgage approvals are required in every state, when you are purchasing or refinance a home. I am located in NJ, so my point of view, naturally, is the NJ mortgage loan approval process. I want to talk about what a mortgage approval really is. I help New Jersey residents obtain mortgage approvals on almost a daily basis, so I have a pretty good idea what I am talking about. When you get a mortgage approval, that ALMOST guarantees that you are getting the NJ mortgage loan you want. An approval is very different from a prequalification. A “prequal” is merely a piece of worthless paper given to you, after your mortgage broker asks you several questions pertaining to your finances. Only a true approval, shows that you can obtain a loan.
Think of mortgage prequalification as the “opinion” of your lender, that you will get approved for the New Jersey mortgage loan that you seek. There is nothing “concrete” about it, however. A mortgage approval is an actually commitment to get the loan you desire. It is ALMOST a guarantee, like I said before. I use the word “almost” because to me, nothing is set in stone until the loan actually closes. In order to actually get an approval, you need to supply your lender with all necessary income documentation, such as W2’s, pay stubs, or 1099 and tax returns if you are self employed. Once an NJ mortgage borrower chooses a home in New Jersey for sale, writes an offer with their Realtor, and does an appraisal on the house, all of that documentation can be forwarded to the lender to start processing your mortgage approval.
A mortgage approval in NJ generally takes bout 2 weeks to obtain, from the time that all the correct documentation reaches the lender’s desk. After the commitment is obtained, it goes over the the borrower’s attorney, if it is a purchase, or is held by the lender, if it is an NJ refinance. the approval outlines all of the loan terms as well, such as the interest rate, total loan amount, and the monthly payment amount. So in short, a mortgage approval is an “official” document that states that you will be getting a mortgage, rather than just a “maybe”.