Many agree that the mortgage process can be overwhelming for anyone. Sure, we can make the process of filling out a mortgage application easier for borrowers with the convenience of online, over the phone or in person. But are we capturing all of the information we need to make a decision? Are we providing a good experience for the borrower or complicating it by not asking the right questions?
Let's review the basics of taking a complete mortgage application.
Two year employment history - Income used to qualify for a mortgage must be deemed stable. This does not mean that a borrower cannot be approved with less than two years on the job, but a two year snapshot on every application is needed. Pay special attention to start and end dates and make sure to address any gaps in the two year history. If your borrower was in school for some of those two years, ensure it is listed on the application.
Two year residence history - Physical addresses should be listed and not a P.O. Box. Dates are also important, because the dates listed on the application will be cross referenced with what the credit bureau is reporting. Yes, I know, inaccurate credit reporting can happen, and the lender will likely allow for a sensible explanation from the borrower.
Funds for closing - Where is the money coming from? Funds for closing will need to be verified in every mortgage transaction. To have an approvable loan, the borrower needs to list how much and where the money is coming from on the application.
Documentation - Documentation, documentation, documentation. As you can see, I cannot say this enough. Documentation is needed to support claims, for example, of an auto loan payoff or changes to student loan payments that are not shown on the credit report. The same goes for income, assets, etc. The lender has to be able to connect the dots and verify via documentation.
I am convinced that it is best to spend more time upfront with your borrower asking questions to obtain an accurate and complete application. Ultimately it is what truly sets you apart from the competition and will make for a better borrower experience.
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