Mortgage Processing: An Overview

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Mortgage processing is the system by which mortgage applications are reviewed and approved or denied. Mortgage processors work with mortgage loan officers and underwriters to ensure that all required documentation is collected and that the loan meets all guidelines. The mortgage processing timeline can vary depending on the type of loan and the lender, but generally, it takes between 30 and 45 days to complete.

Getting a mortgage can be a complex and daunting task. There is a wide range of mortgages to choose from, each with its pros and cons. It’s no wonder it can be challenging to choose which mortgage is right for you. Thus, we’ll be taking an in-depth look at mortgage processing, how it works, and how you can get the right mortgage.

The Steps In Mortgage Processing

Mortgage processing involves the collection and verification of our personal financial information. The loan processor is responsible for organizing the loan documentation for the underwriter. Before sending the loan file to underwriting, we should ensure that all required documentation is in place. There are mortgage processing services that can help with time-consuming, repetitive, and tiresome work at a reasonable cost. Outsourcing this service instead of recruiting staff can save up to 50% on expenditures.

The steps involved in the mortgage processing are as follows:

  • Pre-approval
  • House hunting
  • Selecting a lender
  • Application for a mortgage
  • Home examination and evaluation
  • Underwriting
  • Make plans to cover your closing costs and down payment.
  • Close on your home.

The majority of lenders predict that the process will take six to eight weeks for mortgage loans. However, closing times may differ significantly depending on the lender and loan type. Banks and credit unions require a little more time than mortgage firms.

How Would You Know If Your Mortgage Has Been Approved?

The loan officer will typically contact you once your loan is approved. Sometimes, your loan processor will inform you that your application has been approved. You will usually receive notice of this information through the mail. However, if you use a broker, they will likely give you a heads-up that it is on the way.

Loan Processor Vs Loan Officer

Although a mortgage loan officer and a mortgage processor are frequently mistaken for holding the same position, it is important to realize that they have different duties related to the loan application process. A mortgage loan officer is a qualified mortgage professional who guides borrowers through the loan application process and suggests mortgage loan programs based on their financial requirements. The information is sent to the mortgage processor, who subsequently files the paperwork after the borrower chooses the loan terms and size.

Underwriter Vs Loan Processor

Although the loan processor and underwriter are involved in the mortgage application process, they have different responsibilities. The loan processor’s job is to ensure we have all the documents to apply for the loan. The underwriter’s job is to decide if the applicant can afford the monthly mortgage payments and if the loan will be approved. They can choose mortgage virtual assistant services to optimize their workflow. 

The procedures involved in obtaining a mortgage are rather simple, but the terminology and activities might be perplexing. The mortgage timeline process also involves a huge amount of paper (and digital) records and forms, from the original mortgage loan application through the closing. We can make the transition to ownership less traumatic with a little planning. Before speaking with an agent, take care of a few preliminary mortgage approval steps.

Denial Of The Mortgage Loan At Closing

Though it is not common, there are situations in which a lender may deny a mortgage after the closing disclosure has been issued. This usually happens when changes in the borrower’s credit, income, or ability to close are detected by a third-party “loan audit” organization. If this concerns us, we should speak with our lender directly.

Several mortgage bodies show that around 10% of all mortgage applications are declined yearly. We mustn’t start applying to other lenders before speaking to an advisor, as each application can show on our credit file.

Conclusion

So there we have a few of the most important things to know about mortgage processing and how the system works. Remember, the mortgage process is a complex and intricate collection of duties. There are numerous “micro-tasks” that must be completed precisely. We hope you enjoyed this post and look forward to providing more content to help you learn about this topic in the future.

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