In this blog, we will cover and discuss online mortgage application leading to clear to close. The mortgage application process has changed over the years. There was a time when borrowers met mortgage loan officers face to face. Borrowers either met their loan officers at the mortgage company or the mortgage loan originator visited their home or office.
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The New Normal For Mortgage Lenders
Now everything is done online, including sending out eDisclosures. Due to the online mortgage application system, a mortgage loan borrower can deal with any licensed mortgage loan originator from any state. Mortgage loan borrowers are not limited to their local mortgage companies anymore. A borrower from California can deal with a lender in Florida and vice versa. The technological systems implemented in the mortgage industry expand the choice of borrowers in choosing a licensed mortgage loan originator anywhere in the country.
How Does The Online Mortgage Application Process Work?
Most mortgage companies today have a website where the mortgage loan originator can apply online. These online mortgage application platforms are secured sites where it is fully protected. The initial online mortgage application is a 4-page 1003 mortgage application. It asks mortgage applicants for personal and financial information such as the following:
- Name
- Address
- Phone number
- Social security number
- Date of birth
- Email address
- Reserves
- Employment
- Employment history
- Bank name and amount
- Present address
- Subject property address
- Asset information
- Co-borrower information
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Disclosures On Online Mortgage Application
Disclosures such as the following need to be disclosed by borrowers:
- Bankruptcy
- Foreclosure
- Short Sale
- Judgments
- Party of a lawsuit
- First time home buyer
- Oher federally mandated disclosures
Questions Asked On Online Mortgage Application
The online mortgage application will also ask the following:
- The purchase price of the subject property
Type of loan program
- FHA loans
- VA loans
- USDA loans
- Conventional loans
- Jumbo loans
- Non-QM mortgages
- No-Doc loans
- Doctors Mortgage Loan Programs
- Homes for Heroes
- Fix and flip loans
Once the applicant has completed an online mortgage application, a licensed mortgage loan originator will be alerted via email. Borrowers will be contacted by a loan officer and go over the application prior to running a credit check. Once the mortgage application is reviewed by the licensed mortgage loan originator.
Online Mortgage Application Pre-Approval Link
Online Mortgage Application Process
Loan Officer will do the following:
- Run a credit check
- Review credit report
- Go over the online mortgage application to verify the information stated
- Collect necessary docs
Once the mortgage loan originator deems that the applicant can get approved, the mortgage loan originator will run the mortgage file, application, and credit report, through the Automated Underwriting System for automated approval. If a borrower gets automated approval from either DU or LP automated findings, they are in good shape. DU stands for Desktop Underwriter and it is the Fannie Mae version of the automated underwriting system. LP is the Loan Prospector and it is the Freddie Mac of the automated underwriting system.
How Mortgage Pre-Approvals Are Issued
Everyone issues pre-approval differently. All of our pre-approvals at Gustan Cho Associates are full credit approvals issued by our underwriters. They are called TBD Property Underwriting Approvals. Once the above tasks are completed, the loan officer submits them to the Loan Officer’s Assistant. LOA then goes further and may order VOE and get VOR as well as other necessary docs. Once LOA completes tasks, it is then submitted to processing, and the mortgage processor is assigned. The processor preps the file for an underwriter. Underwriter reviews docs and loan packages and issues a pre-approval which is also a conditional mortgage approval.
What Is The Automated Underwriting System (AUS)
The automated underwriting system is a sophisticated technologically advanced computer system that will analyze a mortgage loan borrower’s mortgage application and analyze the following:
- Debt to income ratios,
- Credit
- Credit scores
- Credit history
Public records such as prior
- Bankruptcies
- Foreclosures
- Deed in lieu of foreclosures
- Short sales
- Judgments
- Tax liens, collections
- Public records
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Automated Versus Manual Underwriting
AUS analyzes all of the information above and renders an automated approval or rejection in a matter of minutes. The automated underwriting system is an online approval system. It is like a brain where almost all lenders require automated approval from the automated underwriting system before proceeding to the next level of processing and underwriting the mortgage loan application. For those mortgage loan applications that cannot get an automated approval by the automated underwriting system, it can potentially be done as manual underwrites. Manual Underwriting Guidelines need to be met. Not all mortgage lenders do manual underwriting. Make sure the lender can do a manual underwrite
Pre-Approval And Mortgage Approval
The pre-approval will convert to an official residential mortgage approval once your mortgage file is processed and underwritten. As long as whatever borrowers stated on an online mortgage application is correct and can be verified, borrowers should have no problem in getting an official mortgage approval leading to a clear to close and close on their home. Many mortgage lenders have overlays. Overlays are guidelines above the automated underwriting system’s approval guidelines. There are lenders like myself that have relationships with wholesale mortgage lenders with no mortgage lender overlays. Borrowers who get an approve/eligible per DU or LP FINDINGS can get a mortgage approved with no mortgage lender overlays. Automated approval is final approval as long as conditions can be met. Homebuyers who need to qualify for a mortgage with a mortgage broker licensed in 48 states with no overlays, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
