Pre-Approval Letters

8 questions

What is a pre-approval letter?


A pre-approval letter is a document from Loan Cabin stating an exact loan amount you can borrow, assuming certain conditions are met later such as a satisfactory financial review, title report, and appraisal. You can give this letter to your real estate agent and potential sellers to show that you’re qualified about buying a home. Obtaining a letter also lets you know what you can afford, so you only spend time viewing properties in

How do I get a pre-approval letter?


Once a qualified person of our staff reviews your credit report, income docs, and assets we will determine the right amount for your pre approval.

How long does it take to get a pre-approval letter?


For a verified pre-approval letter, you will need to upload financial documents such as your last two years W2s, 30 days of current paystubs, last two years of current tax returns, and two months current bank statements. Once we receive all your documentation we will issue a preapproval in 20 minutes or less. Then we will review them and generate your letter. We may require additional processing time if the documentation you submitted is incomplete or if we need to verify overtime, bonus, or commission earnings with your employer.

Why would my verified income be different than my stated income?


The amount of income we verify impacts the total loan amount we can offer you. In some cases, verified income might be lower than stated income. Investor and industry guidelines govern what income we are able to use. Here are a few examples:

•If you earn bonus, commission, or overtime income that hasn’t been consistent over the last 2 years, we may not be able to give you credit for all of it.

•If you are reporting any self-employment losses on your tax return, they will be deducted from your qualifying income.

•If self-employment income is declining year-over-year, we have to use the lower amount.

•If you report rental income, we use the net amount, after subtracting out certain expenses you have written off on your tax return.

•If you are using income from alimony or child support, we have to document that it will be received for at least the next 3 years.

If you want additional certainty as to the purchase price you qualify for, we recommend getting a verified pre-approval letter.