What is mortgage loan processing? Four stages in the loan cycle
Mortgage loan processing involves a series of steps that are carried out over a period of six to ten weeks. This is a very long and complicated procedure for the parties involved. The mortgage loan processor oversees the entire process while the borrower adheres to the instructions given by the lender. Do you want a home loan? If so, you might want to know how to do it. The steps are generally the same, but your lender may have unique standards. There are about four steps you should expect to complete during mortgage loan processing. These are explained below.
Applying for a mortgage – Once you’ve found a suitable lender, you’ll fill out a loan application form. These days, the process is done electronically on the Internet. Once you’ve filled in all the blanks, as candidly as possible, you’ll send it to the mortgage processor. The processor will contact you immediately, instructing you to deliver certain documents. These include your recent bank statement, pay stub, W-2 forms and income tax returns if you are self-employed. The documents are usually sent by post, so the processing of the mortgage loan can be delayed.
Verification of information on documents – When each document reaches the loan processor, the actual processing will officially begin. Documents will be critically checked to ensure they are genuine. To do this, verifiers may call your employer, landlord, bank or other entities listed on your documents. If you pass the pre-approval step, which means you’ve met all the requirements, the mortgage loan processing supervisor will send your file to the lender. Title report and appraisal processing begins at this step. The lender usually takes around 14 days to confirm your documentation, although this can vary. If your home loan qualifies for Loan Prospector, it will be processed faster through automated computer systems.
Securing your loan – This is the approval stage where the underwriters will validate your documentation once more. They may also request your credit reports to determine your creditworthiness. Title search ratings and reports are also confirmed. The underwriter has the maximum authority to reject or accept the borrower’s file. If the file is rejected, it is returned to the mortgage processing department with a rejection statement. If accepted, it is returned to the lender with a preliminary closing statement. Any denied file must be reviewed again by the loan officer and processor to see if there is anything they can do to help the owner. Auto-signature technique is all the rage these days. It requires less paperwork and less time. The computer approves or disqualifies a file while the underwriter checks the documents manually to identify possible problems.
Final stage – If both the mortgage loan processing and underwriting departments are satisfied with your file, the loan execution will enter the closing stage. The loan officer will begin the closing stage following all conditions set by the underwriter. In a short time, you will receive a loan commitment from the lender so that you can determine the actual closing date of the loan. You may need to consult with the seller of the property and the lender to make this decision. Before closing, it is imperative that you compare the Statement of Settlement with the Statement of Good Faith Valuation. The fees listed on both documents should be similar. If all goes well, Outsourced mortgage loan processing it will be over and you will get a house loan.
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