Contract Processing: The Basics | The Mortgage ProcessorsJun 21, 2021
Would you like to learn more about contract processing? Contract processors are the backbone of mortgage lending. They play a key role in helping loan officers move files through the mortgage process by helping qualify borrowers, reviewing documentation for accuracy, and ensuring that all necessary documents have been submitted before submitting the file to underwriters. This blog post will provide an overview of what contract processing entails and how we can help with it!
What is a Contract Processor?
A mortgage or contract processor is an individual who either works for the loan officer or the company as a contractor. These financial experts collect and prepare all of the materials needed in order to secure a home for their borrowers which is why they play such an important role in the home-buying process. They help out by gathering and qualifying borrowers, reviewing documentation for accuracy before submitting them to underwriters so they can be processed easily, making sure that all necessary documents have been submitted to lenders before filing in order to complete the loan process.
They will examine the loan application and verify all of the information provided on it. If any parts of a loan application prove unclear or require further clarification, they may require additional details that could potentially make completing the loan process even longer and need communication with all parties. This is where the Mortgage Processors help fill in all the gaps to speed things up making sure that each file is correctly routed through our system so it can be processed as efficiently as possible.
Collecting Proof of Employment, Assets, Debt, Income, and Homeowners Insurance
A mortgage processor’s primary job is to verify all of the information you have provided on your mortgage application. This means checking your income verification (W-2s, pay stubs, and/or tax returns), assets (checking and savings accounts), and outstanding debts (car loans). Loan processors will pay particular attention to monthly gross income as it can help them determine how much money a borrower should be able to afford in total for their home loan payments. Why is this? Well, lenders don't want borrowers' monthly payment amounts that come out of one's paycheck every month–principal, interest property taxes homeowners insurance--to swallow up their entire salary!
Ordering Appraisals, Credit Reports, and Payoff Information
After verifying the financial situation, the next step is to have the home appraisal. An appraisal is a professional opinion of your home’s current market value. It's one of the most important components in loan processing because it will determine if a lender agrees to lend more money than what your property may be worth, and ultimately affect how much they'll lend you for this reason.
Mortgage processors will also order a credit report to see how the borrower has handled and managed re-paying past bills. This document can predict their ability to make future mortgage payments in full and on time by looking at this history, which enables them to do so effectively.
Lastly, if the borrower is refinancing their mortgage they will be required to disclose how much money that they owe on their current home and this information should help your lender determine what type of monthly payment amount they can afford.
Mortgage contract processing is a step in the mortgage process that doesn’t get much attention, but it can be really important. This final stage can be the most complicated, time-consuming, and frustrating. Making sure everything fits correctly together so no one gets denied at this last-minute stage! If you have any questions about how we do contract processing or what our rates are please contact us today!
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