New: The Seller Finance Playbook, our course on originating seller finance notes, is now open. See the course
Prescreening Guide
Why prescreening your borrower is important:
Pre-screening a borrower is essential to ensure they meet key eligibility and creditworthiness standards before investing time and resources into a full loan process. It helps identify potential red flags early—such as insufficient income, high debt, or credit issues—so you can avoid wasted effort and reduce risk.
When lenders skip the pre-screening process, they often don’t discover until late in the loan origination that a borrower is either non-compliant or poses a higher risk than they’re comfortable with. At that point, the lender faces a tough decision—either move forward with a problematic borrower or start over from scratch to find a new one. That’s why it’s so important to do a quick pre-screen upfront. With a simple pre-screening process, you can identify more than 95% of potential deal-breaker issues before you invest time and resources into a full loan.
What to learn during the prescreen:
During the pre-screening process, the goal is to quickly assess whether a borrower meets the basic qualifications for the loan and whether the deal is likely to comply with lending regulations. You’re looking to confirm key factors such as income stability, credit profile, debt obligations, property details, and borrower intent (owner-occupied vs. investment). It’s also about spotting early red flags—like insufficient income, missing documentation, or potential showstopper issues like foreclosures, bankruptcies and missed housing payments—so you can address them before investing time in full underwriting. Ultimately, pre-screening helps ensure the loan is both viable and compliant right from the start.
How to prescreen your borrower:
The easiest way to prescreen your borrower is to have them fill our prescreen form, and send them the link to it here: https://forms.zohopublic.com/calltheunderwriter1/form/BorrowerPreScreeningForm1/formperma/pNJjs2fbIlmB_K-sx_Wd7cK103XVHYvxvrABTAKIJXA
The form will ask the borrower to enter your email address, and as long as they do that you will be emailed a copy of the results. If you didn’t receive a form and were expecting one just email us at team@calltheunderwriter.com and we’ll send you a copy.
Alternatively, you can talk to them and use the one page guide HERE.
- Borrower prescreening questions:
- 1. Have you been current on all rent or housing payments over the last 12 months?
- If they are not current on rent or have been late in the past year, they will most likely not meet requirements
- 2. How do you earn income, and can it be verified? Can they produce the following docs?
Self Employed: 2 previous yr. ‘s tax returns, or 12 months of current bank deposits.
- W2 wage earner: Last yr.’s W-2 and 2 current pay stubs
- Pension/SSI/Disability etc.: last yr.’s 1099 or current award letter
- 3. Do you have a 2-year income history and can it be documented?
- If 2 years of income verification can’t be documented they won’t meet requirements.
- 4. What is your approximate monthly income?
- 5. Do you have any open credit lines on your credit report? (Car payment, credit card etc.) What are the total monthly payments?
- We want the new monthly mortgage payment + other monthly payments to be no more than 57% of the borrowers gross monthly income
- 6. Are there any outstanding liens or judgments that will appear on your credit?
- 7. Are you currently in foreclosure, forbearance or bankruptcy?
- Active foreclosures and bankruptcies will disqualify a borrower in many circumstances. But if these are in the past they can be ok.
- 8. Do all borrowers have an SSN or ITIN?
- Borrowers will need one or the other to qualify