Mortgage Brokers and Lenders – Who Does What?
The mortgage broker serves as the primary contact for your loan and can work with multiple lenders who provide funds for the loan. The lender pays the mortgage broker a fee for acting as an intermediary and providing customer service.
Filling Out the Application
When applying for a loan, there are standardized forms that need to be completed. Many mortgage brokers now offer the convenience of filling out and submitting these forms online through their website. It is important to take the time to accurately answer all questions, as the information will be verified and used to qualify you for your loan. This includes providing personal and financial information, such as your employment history, income, and assets. The lender will also request documentation to support this information, such as pay stubs, tax returns, and bank statements.
Completing these forms and providing accurate information is crucial to the loan approval process. Inaccurate or incomplete information can delay the loan process or even result in denial of the loan. It is also important to note that the lender may conduct a credit check during this process to assess your creditworthiness. Therefore, it is important to maintain good credit and address any issues that may negatively impact your credit score before applying for a loan.
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
- 3 months bank and money market statements
- Brokerage, mutual fund and retirement account statements
- Proof of other income sources (alimony, trusts, rental income, etc.)
- Credit card statements
- 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
Once you have applied for a loan, an underwriter, also known as an analyst, will review your documentation and verify your ability to repay the loan. If you are under contract for a property, there may also be a loan approval committee that evaluates your creditworthiness and the property being lent on. This process is called underwriting and may raise some questions. It is important to promptly respond to your mortgage broker and keep the process moving smoothly. Be sure to check in with your broker periodically to stay up-to-date with the underwriting process.