There is a tendency by some borrower’s mortgage brokers to spend little time collecting and reviewing the documentation relating to a loan request. The documents submitted are, in many cases, incomplete or misleading.
Brokers who desire a quick and professional response should take the time to organize their files and convey an understandable set of facts to the funding lender. Organizing in today’s world means in a digital PDF format for submission online.
Facts should include:
- Summary of the proposed loan transaction: Amount, term, first, second, refinance, purchase money, cash out.
- Purpose of loan and loan proceeds.
- Explain collateral property address, type, description, condition of the property.
- Loan application form, either a standard 1003 or a commercial loan form if other than 1 to 4 residential units.
- The estimated opinion of value with value conclusions, by whom the opinion was offered, and the inclusion of the supporting data and source(s) if available.
- Provide an income stream for income property if it exists with rent roll and financial statement and by whom the foregoing was prepared.
- Available cash flow from borrower and property (net operating income) to make monthly payments.
- Potential exit strategies-sale, refinance.
- Any noted strengths and weaknesses of the borrower or collateral property.
The funding lenders job will be dramatically faster, more efficient, and pleasant if the borrower’s broker will take the time to get to know their transaction and to articulate the material facts the first time around.
Dan Harkey
Business and Private Money Finance Consultant
Cell 949 533 8315
dan@danharkey.com
I intend this article for educational purposes only and is not a solicitation.
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