September 26th, 2017 6:59 AM by Jackie A. Graves, President
You should and you can know exactly
where you stand with your mortgage getting chances on the very first day you
you serve up your complete, accurate and acceptable borrower profile to your
lender, you will get credit approval (subject to verification) on day one.
preliminary inquiry about obtaining your mortgage financing will lead to the
creation of your virtual mortgage application. The information you provide for
your virtual mortgage application can be fortified with your electronic
submission of supporting income and asset docs. Your mortgage destiny (albeit
subject to integrity review of the information you provide and the appraisal)
will then be instantaneously decisioned using mortgage underwriting software.
it, that’s is how it works, it is the magic of the world wide interweb and some
pretty fancy mortgage approval software.
are only two parts to every mortgage application; the first part is the credit
package, the second part is the collateral. The credit package is you,
your credit, employment, income, assets, your mortgage-ability so
to speak. The collateral is of course, the house you are buying (or
loan approval, like everything else today is electronic. If you provide
accurate, verifiable information about what you do for a living, how much money
you make, how you get paid, how much you have for a down payment and closing
costs and where that money is, as well as have acceptable credit, then
decisioning your mortgage getting is a keystroke.
vast majority of mortgage applications are decisioned with an algorithm, not a
human being. Underwriting engines process, digest and decision virtual loan
files in moments using the employment, income, asset and credit information
disclosed by you; the borrower. If the information provided is accurate and can
be supported with all of the required documentation, then the rest of the
approval process is just a paper chase.
Fannie Mae calls its underwriting engine; Desktop Underwriter (DU)
and the Freddie Mac version is called Loan Prospector (LP). All loans traded in
these secondary markets are approved using one of these underwriting engines.
Lenders that make loans that are not sold to Fannie or Freddie generally use
the same decisioning mechanics, tools and guidelines.
collateral or the house you are buying will be appraised to determine market
value, general condition and any potential major defects. The house you are
buying is the lender’s protection in the event of catastrophic events that
could befall you the borrower and render you unable to pay them back. They want
to know if the house is worth what you are paying for it (or lending against)
and if it is sellable should catastrophic financial misfortune visit you.
that day-one-algorithm-approved mortgage will still need lots of pieces of
paper (which will be reviewed by an actual human being called an underwriter),
to confirm the integrity of the information you provide. And in most cases the
appraisal still needs to be done because the value and the condition of the
house you are buying or refinancing also needs to be confirmed.
if you tell all to your mortgage lender and provide income, asset and credit
documents upfront for review prior to formal application, you eliminate the
uncertainty drama. Your approval will hold up to verification scrutiny.
for some reason you decide not to disclose something in the hopes that the
lender won’t ever find out. This is a perilous strategy because your lender will find
out whatever it is you hope they will miss. Lenders deploy an arsenal of find-out-everything tools
that can detect even the slightest financial or credit misdeed.
you did it, own it, disclose it and tell all. Don’t leave anything out, open
the closet and let all your borrower profile skeletons out and let the lender
sort everything out for you, that’s what they do. Or at least that’s what they
is one big BUT in all of this. Your borrower
profile may have a show stopping issue that will thwart your mortgage approval.
Maybe you have a significant past credit event like bankruptcy or a short
sale or dare I say a foreclosure! The way you get paid, how long you are on
your job or where the money for the down payment is coming from may be outside
approvable underwriting guidelines. Algorithms and fancy software can also
decline mortgage loans.
not. If your mortgage loan decisioning result on day one is not an
instantaneous approval, your mortgage rep may still be able to help you
navigate your way to success. It may involve cleaning up existing barriers to
approval and it may take a little longer, but it can be done. And even if you
can’t get mortgage approval, if your result is a decline, you should and you can know
exactly where you stand with your mortgage getting chances on the very first
day you apply.
Mark Greene - To view the original article click here