MORTGAGE MATTERS

3 min read

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Sep 2022

The Advantages of To-Be-Determined (TBD) Underwriting

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WHAT YOU'LL LEARN

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How To-Be-Determined (TBD) Underwriting works

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Ways it can strengthen your offer

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Why it’s not offered by every lender

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WHAT YOU'LL LEARN

check icon

How To-Be-Determined (TBD) Underwriting works

check icon

Ways it can strengthen your offer

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Why it’s not offered by every lender

Picture this: you’ve found a home you and your family really like. It has everything you’re looking for and more! But then you find out you don’t qualify for the loan you need to pay for it. Wouldn’t it be great to know exactly what you can afford so you can browse homes in that range, and get underwriting without even having a purchase contract? “To-Be-Determined" (TBD) underwriting or what Atlantic Bay calls Fast Track Buyer Advantage, is a process where we issue you a conditional approval of a dollar amount within hours of reviewing your files—no purchase contract necessary!

What Makes Fast Track Buyer Advantage So Great?

Atlantic Bay underwrites all loans up front, not at the end. But what makes Fast Track Buyer Advantage so helpful against the competition is that the underwriter reviews your documents and financial profile before a purchase contract is in place. Other lenders issue preapproval letters, but don’t really start underwriting your file until you have a signed contract.

Because you know the exact amount you can borrow, Fast Track Buyer Advantage also means:

  • You won’t waste time looking at homes outside your budget.

  • Sellers will have confidence in your offer knowing that financing is solid.

  • It’s the next best thing to a cash offer, elevating your offer in a multi-buyer scenario.

  • It gives the seller confidence that your financing is solid.

  • Enjoy a smoother closing process once you find your home because conditions are already addressed.

  • Experience a faster closing process—we average less than 28 days!

How Fast Track Buyer Advantage Works

It all starts with a conversation with us, either in-person, online, or over the phone, to establish your homebuying goals and determine how much you’re comfortable spending each month on your mortgage. As mentioned, we will look at your income documentation, but soon after, they’ll pull your credit. Next, we will send an application to an underwriter up front to check for any possible hurdles now, such as the need for a co-signer or additional questions about your credit. It’s the underwriter’s job to ensure you qualify for the loan product and will pay back your principal on time. A confirmation from the underwriter means you’ve received conditional approval, or the traditional pre-approval letter.

Lenders who don’t offer upfront or TBD underwriting hand your loan off to a processor first before the underwriter. The processor reviews your application for any inaccuracies and makes sure all the boxes are filled. This extra step before underwriting makes the process take as long as a couple of weeks, and you need that purchase contract. Upfront underwriting cuts down the process to just a few hours because the underwriter already determined that you’ve qualified before the file heads to processing. Your conditional approval becomes full approval after you’ve selected a property and a few additional items are taken care of, like getting an appraisal to make sure the property is worth the amount that you’re borrowing.

As we’ve mentioned, Fast Track Buyer Advantage takes pre-approval a step further, underwriting your file without the contract in place yet, saving you time and giving you the exact dollar amount you can afford.

Does Fast Track Buyer Advantage Approval Expire?

TBD approval letters are valid for 30 days, but that doesn’t mean you’re out of luck if you don’t find a house in that time. When you find your home, you’ll need to resubmit updated financial information to get a new conditional approval letter. We will need to make sure nothing dramatically impacted your income, debt, or credit in the last 30 days. So, if you didn’t find a house and your finances are still in good shape, we will simply issue another conditional approval.

Why Don’t Other Lenders Offer TBD Underwriting?

Typically, other lenders don’t offer TBD underwriting because it can be expensive to have loans go through underwriting before processing. Lenders take a risk when they invest their employees’ time reviewing information and issuing approvals that may not lead to an actual loan. Upfront and TBD Underwriting are less common with banks than it is with independent mortgage companies like Atlantic Bay.

If you have any questions about TBD underwriting or Fast Track Buyer Advantage, we’re here to help!