Mortgage lending is not a complicated industry to become a part of. Success mortgage lenders rely upon a steady stream of referrals from satisfied customers and they typically focus on one particular client segment or another. For example, some mortgage brokers focus on conforming loans while others focus on nonconforming loans, those being good credit and bad credit, respectively. Brokers who gain experience with a particular type of client perform well with them because they understand borrower needs far more readily. Specialized mortgage brokers also provide efficiency that allows loans to be processed in a timelier manner. Communication must take place between the underwriter, the mortgage broker, the real estate agent, the seller, and the buyer. Between all of these parts hopefully there is one good communicator between them, usually yourself, your real estate agent, or your mortgage broker.
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A time consuming aspect of mortgage lending that is often overlooked is the underwriting process. The underwriting of the loan works in conjunction with your loan officer (mortgage broker) to ensure that the loan meets all of the required criteria. Often times before approving the loan, the underwriter will contact your mortgage broker and tell he / she to get additional information from you. Additional information requested by underwriters typically includes additional proof of your income or overall financial status to ensure that you qualify. Other times underwriters will look to the actual home inspection papers and mandate repairs that must be made before the house is moved into.
The underwriters job is to thoroughly investigate the loan to make sure it meets the required criteria. For example, if your home inspection reveals that you have above average traces of Radon in your basement, you will be required to install a Radon mitigation system to ensure that the home is safe. This makes sense because if the home was to become unlivable it is less likely that the borrower will repay and the underwriters job would have been all for not.
Mortgage lending services have been at a premium in the past five years because of lowering interest rates that spawned a refinancing craze. At one point, major mortgage brokerages confessed they were having trouble hiring enough mortgage brokers to take on more clients. The average time for a loan process that fires without a hitch is 30 – 45 days. Often times the loan process takes far longer and requires far too many signatures in a half hour long process you will participate in with your broker, your real estate agent and your cosigner.
Mortgage lending is a competitive field because larger institutions often have the most streamlined processes to get loans done quickly and without catches. However many of these large firms are overwhelmed in todays market and you may be happier with the patient personal service of a smaller local mortgage broker. By filling out our free application you will receive as many as four no obligation mortgage quotes from competing brokers.