Is Conditional Approval A Good Sign
Things that are looked at during the first screening phase include your credit history, your personal debt, and your income. As your application moves on to the next phase, it will be looked at in more detail. Getting a conditional approval is definitely good news but you should not start to celebrate just yet.
The Rise Of Big Box Refinance Lenders
Well, its not entirely your fault. There is an expectation that if a company earned enough of your trust to complete an online form, or call a number, or download a phone app, its all the same business model.
These companies are primarily built to originate, and close, high volumes of refinance loans. For the first time in a long time, its becoming a buyers market in many communities.
After writing on FindMyWayHiome.com for the past 10+ years, and after over 1 million visitors to our site, Ive heard this story over and over again.
You trusted the advertising, and now you regret it!
Now, in all fairness, the advertising makes it sound so easy. The way these companies work is that they spend millions for advertising, and sponsoring PGA tournaments.
In order to support this business model, I call it a tele-mortgage model, you have to have a minimally compensated work force. Paying seasoned professionals for the experience they bring to the table is just not in the budget.
What I have found over and over again is that these loan officers make rookie mistakes, time and time again, because the purchase money market does not have the same wiggle room at a refinance that has some benefit other than timeframes and the dream of home ownership.
Get Your Credit In Shape
A lower credit score can make it more difficult for you to get approved for a mortgage, and can also make your loan more expensive with a higher interest rate. If your credit score needs improvement, commit to paying down debt and try to keep your credit utilization ratio below 30 percent. With less debt, especially, your DTI ratio will be lower many lenders look for 36 percent or less.
In addition, check your credit report to ensure there are no errors that could be negatively impacting your score. You can get a copy from the three major credit bureaus. If you do find a mistake, contact the agency to dispute it as soon as possible.
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Complete A Full Mortgage Application
After selecting a lender, the next step is to complete a full mortgage loan application.
Most of this application process was completed during the pre-approval stage. But a few additional documents will now be needed to get a loan file through underwriting.
For example, your lender will need the fully executed Purchase Agreement, as well as proof of your earnest money deposit.
Your lender may also request updated income and asset documentation, such as pay stubs and bank statements.
You will receive a Loan Estimate within three business days which will list the exact rates, fees, and terms of the home loan youre being offered.
What Are The Steps In The Mortgage Process
The Loan Approval Process is relatively simple but can seem very mysterious if it is never explained to you. The best news ever is that it takes less and less time these days.
No matter how fast, however, every mortgage application has to go through these steps:
The ApplicationThe key to the loan process going smoothly is the initial interview. At this time, we make every effort to obtain all pertinent documentation so that unnecessary problems and delays can be avoided. To make sure you are prepared, see our Application Checklist.
Ordering DocumentationSometimes immediately, but in no case more than 24 hours after application, we request a credit report, appraisal on the property, and any verifications required to confirm information that was not documented at loan application. These could include employment, bank account or rental verifications, for example.
Awaiting DocumentationAs we receive any information requested, we review it for any potential problems and request additional information, if necessary, to solve them. We keep you aware of what is going on through status reports throughout this period. In the past, it often took 60 days to process a loan. That is quite unusual these days. We often can have loans approved and closed in two weeks. It will depend upon your individual circumstances.
PaymentsThe mortgage lender will provide you with a coupon book, monthly billing statement or option to have your payment automatically drafted each month.
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How Much Money Does A Loan Originator Make
Compensation for mortgage officers can be based on commission, salary, or a combination of the two. BLS statistics show that, as of May 2017, the median average salary for mortgage loan originators was $64,660. This means that 50 percent of loan officers made more than this amount and the other half made less.
How To Get The Job
DON’T OVERLOOK THE VALUE OF A DEGREE
Even when a college degree isn’t technically required, those who have them or have extensive experience, even in a related field, have the best prospects.
IT’S WHO YOU KNOW
Some firms and institutions expect loan officers to build their own client bases, so applying with a list of contacts and network referrals can set you apart from other, less prepared candidates.
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Mortgage Broker Vs Loan Officer: Whats The Difference
A mortgage broker is a licensed financial service provider that works with multiple lenders to find the best interest rates and loan programs. A broker acts as an intermediary between the borrower and several lenders, but the mortgage brokerage company doesnt actually provide the money for the loan.
A loan officer typically works for one lender, which means they are limited to the products that a particular lender offers. A loan officer may work for a mortgage bank, credit union or institutional bank, and their employer can provide the funds for a home loan directly to a borrower.
Order A Home Inspection
After your offer is accepted, the next step in the mortgage process is typically a home inspection.
A thorough home inspection gives you important details about the home beyond what you may be able to see on the surface.
Some of the areas a home inspector checks include:
- Homes structure
Getting a home inspection is important because it helps the buyer know if a home may need costly repairs.
What is uncovered during an inspection can become part of a sales negotiation between buyer and seller, and their respective real estate agents.
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Question : Can You Explain Your Process And Turn
Assuming the application process should work a certain way without understanding and setting expectations can lead to disappointment. Bear in mind the following:
- Every lender and loan officer has different processes and turn times, so it is a good idea to understand this upfront.
- Your loan officer should be able to explain the mortgage process concisely and clearly.
- Some of the most modern application processes start and finish all in the same platform, which simplifies things for you as a consumer.
Question : How Many Transactions Do You Work On Per Month And Per Year
Completed transactions are similar to upvotes or likes. The more transactions the loan officer is working on or has closed, the more experience they are likely to have and this experience really matters. Seek out an LO who has a solid track record. One to two closed loans a month is generally considered good.
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Have Your Documents Organized
The best way to keep the mortgage underwriting process on track is to have all of your financial documents organized before you apply for a loan. If you have to request paperwork from a specific account holder, for instance, do so as soon as possible.
It can be smart to put together a file that includes the following:
- Employment information from the past two years
- W-2s from the past two years
- Pay stubs from at least 30 to 60 days prior to when you apply
- Account information, including checking, savings, money market, CDs and retirement accounts
- Additional income information, such as alimony or child support, annuities, bonuses or commissions, dividends, overtime, a pension or Social Security
In addition, if you plan to use gifted funds for a down payment, its important to have those funds in your possession well before you apply. Youll also need to have a gift letter to verify that the money is indeed a gift. Doing both can help you avoid unnecessary setbacks in underwriting.
Your Guide To Becoming A Loan Officer In 2021
Loan officers are the critical human connection between a lender and a borrower. Mortgage loan officers do more than just collect documents and fill out forms. They enable homebuyers to finance the homes that will house their families and serve as a stable investment for years to come.
This Article Covers:
- How to get started as a loan officer
- Factors to consider when becoming a loan officer
- Laws that you need to know
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Question : Where Are Your Processing And Underwriting Centers Located
Every loan needs to be sent to a processor and underwriter as part of the loan process. Bear in mind the following:
- If processing or underwriting is not in your time zone, you may want to know what hours you can contact them for questions.
- Its prudent to find out how this might impact your loan closing.
Choosing The Right Loan Officer For You
Since mortgages are some of the most complex loans to navigate and require a mountain of paperwork, it can be overwhelming for potential borrowers. If youre looking for the right loan officer for you, its important that you feel comfortable and confident from the very beginning. Loan officers will offer advice based on your situation, wants, and needs and its vital that you trust the advice you are given is the best. Because this relationship is so important, many home buyers choose to work with the same loan officer each time they buy a new home or property.
For military families and veterans, youll want to ensure your lender is not only an expert in helping you navigate the loan process, but that they also have experience working with VA Loans. There are thousands of loan officers out there so its important that you dont just pick the one that gives you the best rate, but instead do your due diligence and read reviews and testimonials in addition to setting up a consultation so you pick a loan officer you feel you can trust.
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Likelihood Of The Value Of The Property Going Down
The value of a property can fluctuate a lot over the years, and for a variety of reasons. Changes in the state of the economy or the property market can see house prices rise or plummet, renovations made to a property can increase its value, and changes in the local area can have positive or negative effects, there are many factors at play.
If you have a mortgage on a property and the value of the property increases, then your loan-to-value ratio decreases. Any repayments you have already made on your mortgage will decrease the LTV even further. Since a lower LTV means less risk for the lender, they are hoping that the property value will increase.
A decreasing value could see the LTV rise above 100%, meaning the lender is more likely to lose money if you, the property owner, can no longer pay their mortgage payments. So, if an evaluation of the property shows that its value is likely to go down, this will lower your chances of getting approved. If you want to find out how at risk your property is for devaluation, check out these 10 most common things that devalue your house.
What Does A Mortgage Loan Originator Do
MLOs will work with you through the steps of getting a mortgage, answering questions, collecting documents and verifying information. If youre purchasing a home, theyll also provide an estimate of your loan amount and interest rate based on a review of your income, credit and assets. This mortgage preapproval can help you figure out your home buying budget and show real estate agents and sellers that youre willing and able to purchase the home.
The MLO will continue to work with you through underwriting and help ensure you make it to closing. Remember, an MLO can be a person and/or institution. While the loan officer is the person who works with you, the lender is the institution that initially funds the loan. This can be a bank or non-bank lender, like Rocket Mortgage®.
Get approved to buy a home.
Rocket Mortgage® lets you get to house hunting sooner.
How Much Do Loan Officers Make Per Loan
As of 2021, loan officers are averaging salaries of $170,000 per year, but this can widely vary depending on their business model and how many loans they close. Most officers make a 2% commission off of every loan they originate. So, the more work they put in, the more money they get out. This is great news for anyone who wants a career with virtually unlimited earning potential. There are no real caps on how much business you can do in a year beyond how much time you want to put in. Growth potential is always present. For example, if the average loan officer closes $250,000 loans at 2%, hell make $5,000 in profit. Those officers who choose to close one loan a month will typically earn around $48,000 after taxes, while those who do two or three can earn $144,000.
What Is A Mortgage Loan Originator
A mortgage loan originator is a person or institution that helps a borrower get the right mortgage for a real estate transaction. The MLO is the original lender for the mortgage and works with the borrower from application and approval through the closing process. An MLO can be a lending company, mortgage broker or loan officer.
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Can Mortgage Loan Officers Make A Lot Of Money
The answer is yes, you can make a lot of money as a loan officer. But, like all career paths, you have to put your nose to the grindstone.
Loan officers are paid either on the front and/or on the back.
If a loan officer makes money on the front, it means they get paid for fees associated with processing a mortgage, often categorized as settlement costs or processing fees.
Getting paid on the back means that the bank filing for the loan gives money to the originator as commission.
You may notice that regardless of which structure you are paid as a loan officer, both require that you are closing loans correctly and efficiently.
If you are can balance a growing network of referral partners while properly vetting and educating your customers, a career as a loan officer can be quite lucrative. So how much money does a loan officer make? The answer, more so than in many other jobs, is that your income is up to you!
Employment Of Loan Officers
Increased demand for loan officers is expected as both businesses and individuals seek credit to finance commercial investments and personal spending. Loan officers will be needed to evaluate the creditworthiness of applicants and determine the likelihood that loans will be paid back in full and on time.
However, the decline of bank branches and the increased use of productivity-enhancing technology in loan processing are expected to slow employment growth.
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What Is A Mortgage Loan Officer
A mortgage loan officer is a representative of a bank, credit union, or other financial institution who assists borrowers in the application process. Most mortgage loan officers also work with individuals and small businesses on a variety of other loans.
Loan officers must have a comprehensive knowledge of lending products, as well as banking industry rules and regulations, and the documentation required for obtaining a loan.
Loan officers are paid either “on the front,” “on the back,” or some combination of the two. “On the front” refers to charges you can see, such as for processing your loan, often called settlement costs. You can pay these fees either out of pocket when you sign the papers or by incorporating them into the loan.
If a loan officer makes money “on the back,” that means they’re receiving a sort of commission from the bank for selling you the loan. This is a charge that you do not see. When a loan officer claims to be giving you a “no out-of-pocket” or “no-fee” loan, they are still making money but are charging it “on the back.”
So isnt that better for you? Not necessarily. Although the bank is paying the loan officer a commission, the money is really coming from you, the borrower, in the form of a higher annual percentage rate to make up for lost fees. In fact, the lending institution could be making a lot more money this way, as it stands to get a higher interest rate for what could be 30 years or more.