Remove financing contingencies and stress with true upfront approval.
Financing contingencies are a critical part of the home-buying process, and understanding how they work can significantly impact your ability to navigate contracts. As the real estate market is expected to remain strong, many contracts will likely feature minimal contingencies. Among these, financing contingencies stand out as one of the most important.
How true upfront approval helps. To manage financing contingencies effectively, it’s crucial to remove them upfront through true upfront approval. This process includes the following steps:
- Completing a full loan application.
- Undergoing underwriting before making an offer.
- Verifying income, assets, and credit during underwriting.
"Preparing now is the best course of action."
Once underwriting is complete, the only remaining steps typically involve:
- Ordering an appraisal (if required).
- Obtaining title work.
- Securing an insurance policy.
- Verifying employment before closing.
Taking these steps early reduces stress and ensures that financing won’t fall through, providing peace of mind for both buyers and sellers.
Avoid the stress of last-minute preparation. A common mistake buyers make is casually browsing homes and submitting offers without proper financial preparation. Acting without prior approval often results in scrambling to catch up, creating stress during the 30-day closing period.
Pro tip: Start the approval process early—even months before actively searching for a home. This allows time to:
- Pay off debts
- Access funds (e.g., through a home equity line of credit)
- Address other financial matters
Pre-approval vs. full underwriting. It is essential to understand the difference between pre-approval and full underwriting. Pre-approval typically involves a preliminary review based on information provided by the buyer, while full underwriting includes a thorough evaluation by an underwriter who verifies income, assets, and credit. A fully underwritten approval gives buyers a significant advantage, allowing them to submit non-contingent offers with confidence.
Without full underwriting, financing contingencies can lead to serious risks, such as losing a deposit or facing legal issues if financing falls through. However, with true upfront approval, buyers can proceed knowing their loan is secure, as long as they maintain stable employment and avoid major financial changes during the process.
The underwriting process usually takes between one and three days, depending on the complexity. This brief timeframe can make a significant difference by reducing uncertainty and simplifying the transaction for all parties involved. By vetting borrowers and confirming collateral (the property being purchased), the financing contingency can be eliminated, resulting in a smoother and more secure home-buying experience.
If you’re planning to purchase a home in 2025, preparing now is the best course of action. If you have any questions or need assistance, we’re ready to provide expert guidance:
- Jon DeHart: (703) 286-9771 | [email protected]
- John Pyne: (703) 855-5158
Starting the upfront approval process early ensures buyers are well-positioned for success and reduces stress when the right property comes along.
