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Mortgage Brokers and Lenders – Who Does What?
The mortgage broker commonly referred to as the loan officer or lender is the person or company who is your main contact throughout your loan. They are often able to work with a number of lenders, who actually provide the funds for the loan. They should be licensed in the State of your residence. Website to verify: http://www.nmlsconsumeraccess.org
Filling Out the Application
There are standard forms to be completed when applying for a loan. Some mortgage brokers keep these on their website so you can fill out and submit the forms on line. The information will be verified and used to qualify you for your loan, so take the time to answer questions accurately.
The mortgage broker will need copies of the documents you began gathering in the first phase of the loan process, including:
- Either 2 years of W-2 forms from your employer or 2 years of tax returns if you are self-employed
- Recent pay stubs
- 2-3 months bank and money market statements
- Brokerage, mutual fund and retirement account statements if applicable
- Proof of other income sources (alimony, trusts, rental income, etc.)
- Credit card statements if requested
- Auto /boat / student / miscellaneous loans
- Drivers’ license or form of ID
- If you’re not a US citizen, then copy of your green card or visa
- Copy of any existing mortgage debts if you are applying for a home equity line of credit or another mortgage
Stay in Communication
The lender will have an analyst, usually called an “underwriter”, crunch your numbers and verify your documentation to confirm your ability to repay the loan. Once you are in contract on a property, there may also be a loan approval committee which will meet to review the underwriters’ conclusions regarding your creditworthiness, and to evaluate the property on which they are lending. This is called the underwriting process, and questions are bound to arise, and certain conditions may need to be met prior to issuing the Clear to Close which comes right before Loan Docs. The lender will issue a full loan approval or Desktop Underwriter (DU) approval commonly used for conventional loans. Whereas, LP (loan prospector) is commonly used for FHA loans. They can be intermingled, but ALL prime mortgages start with an automated underwriting engine these days. Be sure to return your mortgage broker’s calls promptly to keep the process moving forward smoothly. Check in with your broker periodically.
Joel Blumenfeld, Blumenfeld Group and Berkshire Hathaway HomeServices California Properties does not endorse any of the products or vendors referenced on this material. Any mention of vendors, products, or services is for informational purposes only.