Mortgage Application Process
The mortgage application process has changed over the years. There was a time where you met your mortgage loan officer face to face either at the mortgage company or the mortgage loan originator visited your home or office. 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 company anymore. A mortgage loan borrower from California can deal with a mortgage lender in Florida and vice versa. The technological systems implemented in the mortgage industry expands the choice of mortgage loan borrowers in choosing a licensed mortgage loan originator anywhere in the country.
Online Mortgage Application
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 where it asks you for your personal and financial information. Your name, address, phone number, social security number, date of birth, email address, reserves, employment and employment history, bank name and amount, present address, subject property address, asset information, co-borrower information, and disclosures such as whether you have file bankruptcy, had a foreclosure, have judgments, are a party of a lawsuit, whether you are a first time home buyer, and other federally mandated disclosures. The online mortgage application will also ask you what the purchase price of your subject property is, whether you are planning on applying for a FHA insured mortgage loan, VA loan, USDA loan, Homepath Loan, or Conventional Loan. Once you have completed your online mortgage application, a licensed mortgage loan originator will be alerted via email and might contact you to go over your application prior to running a credit check. Once the mortgage application is reviewed by the licensed mortgage loan originator, he or she will run a credit check and review your credit report and your online mortgage application to see whether you qualify for a mortgage loan program. Once the mortgage loan originator deems it that you can get approved, the mortgage loan originator will run your mortgage file, application and credit report, through the Automated Underwriting System for an automated approval. If you get an automated approval from either DU or LP automated findings, you will be issued a pre-approval. 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.
Automated Underwriting System
The automated underwriting system is a sophisticated technologically advanced computer system that will analyze a mortgage loan borrower’s mortgage application, 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, and public records and render an automated approval or rejection in a matter of minutes. The automated underwriting system is an online approval system and it is like a brain where almost all residential mortgage lenders require an 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 can be done as manual underwrites. Not all mortgage lenders do manual underwriting so you need to make sure that the mortgage lender you choose to do an manual underwrite are able to do so.
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 you stated on your online mortgage application is correct and can be verified, you should have no problem in getting an official mortgage approval and eventually a clear to close and close on your home. Many mortgage lenders have internal mortgage lender overlays. Mortgage lender overlays are guidelines above the automated underwriting system’s approval guidelines. There are mortgage lenders like myself that have relationships with wholesale mortgage lenders with no mortgage lender overlays. If you can get an approve eligible per DU or LP FINDINGS, I can get your mortgage loan approved with no mortgage lender overlays. Your automated approval is your final approval. If you are looking for a mortgage lender in Illinois, Florida, Wisconsin, California, or Indiana with no mortgage lender overlays, please contact me at 262-716-8151 or visit me at www.gustancho.com.