How to Process Loans
Check if the borrower has received pre approval for the loan., Verify the borrower’s employment., Review the borrower’s credit report., Ask the borrower to submit any additional reports or documents, as needed., Understand the role of the...
Step-by-Step Guide
-
Step 1: Check if the borrower has received pre approval for the loan.
By the time the borrower's application reaches you, they may have received pre approval for the loan via their bank, based on their finances.The lending agent at the bank will act as the intermediary between you and the borrower.
Processing usually occurs 5-20 days after the borrower has completed the loan application. -
Step 2: Verify the borrower’s employment.
In addition to reviewing the borrower’s tax returns and current proof of employment, you should also contact your employer for official verification. , Use a credit report from three credit monitoring bureaus to verify the borrower’s debt and payment histories, as well as borrower’s credit score.
Check the borrower’s assets (checking and savings accounts) and any outstanding debits (car payments, student loans).If there are unacceptable late payments or judgments for collection, have to borrower provide satisfactory written explanation for them. , For example, if the borrower is purchasing a home, you will need their title report to ensure there are no outstanding liens against the title, which would affect their legal ownership.
For a mortgage loan, you will need to pay particular attention to the borrower’s income to ensure their total monthly mortgage payments will not swallow up their total gross monthly income.You should also make sure the borrower has a home insurance policy. , The underwriter is responsible for determining if the loan package is acceptable and that the borrower’s risk has been established.An underwriter may also look at the borrower’s ability to pay off the loan, their credit history, and any collateral offered against the loan.Lender underwriting occurs 20-30 days after it has been submitted by the loan processor., A “suspense” occurs if more information is needed for the loan package.
Discuss any issues with the underwriter to try to resolve them.
If necessary, the borrower may be contacted by the underwriter to supply additional documentation., Once the loan package is in order, the underwriter will give conditional approval to the bank, who will then notify the borrower of their approval.
As the loan processor, you are now no longer involved in the loan package. -
Step 3: Review the borrower’s credit report.
-
Step 4: Ask the borrower to submit any additional reports or documents
-
Step 5: as needed.
-
Step 6: Understand the role of the underwriter.
-
Step 7: Communicate with the underwriting team if a “suspense” is placed on the loan.
-
Step 8: Allow the underwriter to approve or deny the loan request.
Detailed Guide
By the time the borrower's application reaches you, they may have received pre approval for the loan via their bank, based on their finances.The lending agent at the bank will act as the intermediary between you and the borrower.
Processing usually occurs 5-20 days after the borrower has completed the loan application.
In addition to reviewing the borrower’s tax returns and current proof of employment, you should also contact your employer for official verification. , Use a credit report from three credit monitoring bureaus to verify the borrower’s debt and payment histories, as well as borrower’s credit score.
Check the borrower’s assets (checking and savings accounts) and any outstanding debits (car payments, student loans).If there are unacceptable late payments or judgments for collection, have to borrower provide satisfactory written explanation for them. , For example, if the borrower is purchasing a home, you will need their title report to ensure there are no outstanding liens against the title, which would affect their legal ownership.
For a mortgage loan, you will need to pay particular attention to the borrower’s income to ensure their total monthly mortgage payments will not swallow up their total gross monthly income.You should also make sure the borrower has a home insurance policy. , The underwriter is responsible for determining if the loan package is acceptable and that the borrower’s risk has been established.An underwriter may also look at the borrower’s ability to pay off the loan, their credit history, and any collateral offered against the loan.Lender underwriting occurs 20-30 days after it has been submitted by the loan processor., A “suspense” occurs if more information is needed for the loan package.
Discuss any issues with the underwriter to try to resolve them.
If necessary, the borrower may be contacted by the underwriter to supply additional documentation., Once the loan package is in order, the underwriter will give conditional approval to the bank, who will then notify the borrower of their approval.
As the loan processor, you are now no longer involved in the loan package.
About the Author
Cynthia Hamilton
A passionate writer with expertise in cooking topics. Loves sharing practical knowledge.
Rate This Guide
How helpful was this guide? Click to rate: