How to Get Your Loan Approved Faster
Often the Universal Residential Loan Application (or the good old “ten-o-three” form) is submitted with missing fields and this may impact the time it takes to close a loan. Submitting a complete and accurate 1003 can help you avoid delays, and ultimately speed up the loan process.
We polled our team of expert underwriters, to determine what mistakes they most commonly see on the 1003 form and provided some tips to prevent them in the future.
Top 10 Most Common Mistakes to Avoid
Mistake #10: Interviewer fails to ask all 13 questions on the declaration page.
It’s crucial to ask every question on the 1003, after all…they’re there for a reason.
Mistake #9: The borrower fails to review the liability section.
It’s important to remind the borrower to confirm that all liabilities appear on the 1003 that were imported from the credit report.
Mistake #8: Free and clear properties missing.
The borrower must confirm if they own other real estate that may not be listed on the credit report as a mortgage. Free and clear properties will appear on tax returns, so taxes and insurance will need to be included in the DTI. Don’t assume all assets will be on the credit report… When in doubt, just ask!
Mistake #7: Marital status entered incorrectly, or left blank.
Don’t forget to ask the borrower about their “better half”. Often times, marital status is entered incorrectly or even left blank. Make sure you explicitly ask if they’re married or have children.
Mistake #6: Other income not listed.
In section 5, alimony, child support, or separate maintenance income must be listed under the section labeled ‘Describe Other Income’.
Mistake #5: Missing assets.
Often, borrowers do not list all of their assets. Assets must be listed along with dollar amount, bank name, and type of account. It is important that the borrower’s account reflects sufficient funds in order to close.
Mistake #4: Borrower’s address doesn’t cover 2 years.
The 1003 requires the borrower list the last two years of residency (No rounding up!). If their address listed is different than the one on the W2, there can be delays as other forms of address verification may be required.
Mistake #3: Employment gaps within last 2 years.
Verification for all employment within the past 2 years is required. If there are gaps in employment, a condition for either verification of the prior employment or a letter of explanation (LOX) will be needed. Make sure your borrower is supplying a full two years of employment. (Once again, no rounding up!)
Mistake #2: Current housing expense blank.
This number can include a combination of rent, first mortgage, P&I, hazard insurance, real estate taxes, mortgage insurance, and homeowner association dues.
Mistake #1: Income not broken out.
The borrower and co-borrower’s income must be broken out if they receive income other than base pay. Overtime, bonus and commission must all be listed here.
Avoiding these 10 simple mistakes can lead to:
- Faster closing times
- Less back and forth with your Account Executives
- Time to focus on new opportunities
We’re sure that you personally have never made any of these common mistakes, but perhaps a colleague of yours has. Either way, it’s great information to keep top of mind. For access to more helpful tips and tricks, Become a Freedom Mortgage Wholesale client today.