Mortgage Approval Essentials
Origination
The mortgage approval process consists of several stages, including origination, processing, underwriting - which includes issuance of the commitment letter - and closing. The entire process could be in the range of thirty to ninety days, depending on the mortgage type, borrower's information and property information.
In order for the process to work efficiently, the origination stage must be handled professionally and correctly by a well trained loan officer; and if he/she has a few years experience in the industry, that is even more comforting to the borrower who has placed trust and confidence in that person to get the job done.
Mortgage loan officers are responsible for making sure that the application is completed correctly and all required origination documents and qualification criteria are met, so the more confident a borrower feels toward the personal contact representative of a lender, the less likely the chance of unnecessary delays in the process.
A borrower's credit report is among the most important documents in the mortgage origination package. Loan officers must be able to determine whether or not the borrower's credit status, income qualification ratios, and assets (in the case of a purchase) meet the lender's program guidelines in order to better serve that borrower.
In many cases, if a borrower's income or assets is at issue the borrower may be able to address these concerns without additional help from third parties, but in the case of the credit report, professional credit agencies may have to be consulted. Credit agency professionals are able to determine the presence of errors on a consumer credit report, contact credit bureaus, and request corrections and/or removal of them.
Although free credit reports are made available to consumers by the three major repositories - Experian, Equifax and Trans Union - many consumers have relied on the services of professional credit agencies to interact with the credit bureaus on their behalf in correcting/removing credit report errors.
A mortgage loan officer should recognize any potential discrepancies in the report before submitting a loan for processing. Informing a borrower of potential problems and suggesting possible solutions at the origination stage will save valuable time as well as money that would otherwise be spent by the borrower.