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Sam

Approval process:
The lender needs to know the risk factor associated with a debtor. These factors are checked for in the approval process. The factors are:

Affordability in payment: The lender compares your monthly expenses and the debt payments against your monthly income. This analysis aims at knowing your payment capacity for a month.
Credit: The lender takes into account the following:
- History of previous mortgages, if any
- Payment history of debts
- Credit card usage
- Rent payment
- Bankruptcies, foreclosures, etc.
These financial transactions are subject to detailed analysis. Any irregular payments, declared bankruptcies and foreclosures can affect your credit adversely.
Collateral: The worth or the equity in the property going to be pledged is important for the lender. The amount of mortgage you can afford has to be less than or equal to the value of the collateral. Thus an inspection of the property is carried out and the value is estimated. They also check the investment you make towards your collateral.
Debtor attitude: In spite of fulfilling the above three factors if the debtor has a tendency to not be regular with payments and is not co-operative with the company, it becomes very difficult for the lender to effectively communicate with them. A timely and full monthly payment is an indicator of commitment to the loan and the lender. This is what the lender is looking for.
Chosen- loan details: The lender also assesses
- The type of loan you have applied for
- The term of the loan
- For what purpose you need the loan
- The number of co-borrowers, if any.

You are a loan prospect and a potential client to the lender. You don't have to worry about the approval process, if you fairly qualify favorably to the above factors, you will get your loan. So, co-operate with your lender and get this process fast and efficiently.

Guest

I went to my mortgage lender/ service company for a rate and principle reduction only . they approve the loan and forward paper work re-refiance on term and rate and lock in 5.o percentfor 60days. keping the note on all terms in place other then the rate re-ductions, they ask if this was due to a hard=ship or just wanting a lower interest rate- I said both I was not in forcloser or behind of monthly payment yet I was paying late fees by paying after the 15th for the last seven month on the 16th or 19th they still took the late fees and I feel that what the servicer wants to collect because they said do-not worry as long as the payment is not pass 30 days your not consider late(bull $600 - in late fees ) they pull the re-finace 10 days later after when we sent them the forms to pick tittle insurence company and setting a date for closing all we need was to bring $1,700 to the table now they are not taking phones call or re-turning calls I get a new operator each time and the young lady who took the application wrote on file loan disapprove because buyer will not have money a closing that was not true she never sent a denial letter pulling the loan and they nedd our credit score had fallen due to medical bill in collaction yet she said the term of teh note was the same and they were not pulling credit on this finance this was a rate and tern loan only . I feel this is a big scam most of the big lenders & banks went before congress asking for huge taxpayers money , they would help home-owners stay in there home and work out a resolution on keeping there mortgage from forclosing on types of modifications not true the lipp serivce is we do not want your homes it would cost to much yet they want you to be behind 60 to 90 days behind in payments raking in all late fees and re-setting the rate on a 3 to 5 months and reurn the rate later once you catch up no one will be able to keep up if the rate and term are not lock in a fix terms I feel once congress said they would buy all there junk bad loans and redo the mortgage they took away the borrower fighting chance to work with there banks and lender on working out a plan to keep there homes and to see what there doing with all the money they grab is a sell out to congress and every taxpayers in America who is in a great need to keep there life work ,pension ,jobs and health-benefits all go to those who turn the money and ran .

sara · Posted: Fri Feb 06, 2009 6:37 am Post subject:

Well dena, I understand how you feel. Yes, there are lenders who received bailout package and some of them even helped borrowers avoid foreclosure. But it's true that there are lenders and mortgage companies who keep charging extra fees from borrowers thereby making things difficult for them.

I guess the lender is now denying a refinance loan. Perhaps the underwriters have come across some discrepancy in your application, due to which the loan has been denied. I know it hurts, but there's nothing to do execpt move on and try for a refinance with some other lender.

Why don't you consult the lenders in this community. Perhaps they could be of some help to you. You may go for a no-obligation free consultation with the lenders here. They'll review your financial situation and let you know if a refinance is possible.

Take care

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What information is analyzed during the approval process?