This is a follow-up to my earlier “Survey says…” blog where I said that the mortgage loan application was a key to a smooth loan process. For Realtors with disorganized clients, loan applications can be the nightmare part of the job. The trick is to keep the client focused on getting it right the first time, thus avoiding delays in their close and your commission.
Let’s assume that the lender is using the Fannie Mae Uniform Residential Loan Application. Yes, at nine pages it is a bit of a monster. This is a good time to remember that old joke about eating an elephant – one bite at a time. Here are some places to urge your client to focus special care.
Double Check Numbers
There is a good chance that your client will be filling out the application online, adding the potential for typos. Be sure that they double check critical numbers like Social Security numbers, account numbers, and date-of-birth. One wrong number here can delay loan approval and kill the sale.
It’s funny, but life goes along and we don’t really think about the details of our financial lives. We get a paycheck, we pay our bills, and life is good. This doesn’t work for filling out the loan application.
Before your client starts, have them pull out last year’s taxes and look at things like salary, bonuses, and investment income. They will need this information if they plan to generate enough income to satisfy underwriting.
Cover Your Assets
Assets and liabilities are critical to loan approval. Lenders aren’t expecting every borrower to have some huge net worth, but it is important that they see assets, like bank or retirement accounts, as well as liabilities. Remember, liabilities will show up on the credit report, so this is the time for total honesty.
Hopefully, the borrower looked ahead and kept his or her credit card balances as low as possible. High balances here can be a real problem, especially when you have mostly non-liquid assets, like real estate, cars, and retirement accounts.
The key to a successful loan process is usually organization and good information. These are absolutely necessary for completion of the application. Here are some steps you can suggest to your client to make the process go well.
1. Review the entire application completely BEFORE you enter anything.
2. Make a list of important information they will need, like income and account numbers.
3. Gather and organize the information on the list.
4. Finally, fill out the application and they are on their way.