What Are the Questions that Mortgage Lenders Could Ask Borrowers?
by Simon Morris I am a freelance writer.While
considering requests for loans today, most lending companies would make sure
that there is an authentic or genuine telephonic conversation with the online
loan applicant before they proceed to approve and fund the loan request. This
seems to be quite a common and effective security measure for ensuring that the
loan is meant for that particular customer. They would ask the consumers
whatever they want to and ensure that the loan is just right for the concerned
party.
Many
questions are being asked as a standard procedure during the online loan
application process. The lenders have the right to ask questions such as:
Borrower’s
Name
Date
of Birth
Employment
Status
Address
Income
Bank
Details
But
it is important for lenders to ask various follow-up questions to confirm that
they are getting genuine information and could rely on the borrower. Moreover,
it would give the borrowers or potential customers, opportunities to put in
their inquiries if any and clarify all their doubts. Let us explore some of the
vital lender questions that a borrower may have to answer over the phone.
As
part of the well-recognized ICO or FCA regulation, it is mandatory that the
lender tells the borrower to actually verify their identity. Liberty Lending also wishes to
encourage genuine borrowers. Here are some common questions.
·
Could you confirm your precise date of birth, please?
·
Could you please confirm the mobile number you
are using?
·
Could you tell the first line of precisely your
current address?
Then the lender would be cross-checking all the information that has been provided in
the loan application form. This is supposed to be a quick examination that
takes place just in a few seconds only. The lender would be expecting you to be
ready with a proper explanation any credit report discrepancy. For borrowers,
it certainly is a wise idea to know the causes, precise debts, and exact
amounts involved in case you are anticipating some queries of this sort.
Before
borrowers pit in their loan request applications, lenders would want you to get
familiarized with the needed documents and be ready to answer questions
pertaining to your loan request. It is a good idea to organize all your
documents and go ahead with the lender’s pre-approval for accelerating the
process.
Mortgage
applicants would be asked to substantiate with relevant documents to prove
current income, provide permission for reviewing their next tax returns or even
verify their employment. However, currently, lenders are asking far too many
questions. Even though it is a bit too much to ask questions regarding from
where each and every dollar in your precise bank account is coming, many
lenders would ask you to explain as they need to meticulously document
everything.
Employment Record
It
is pretty common for lenders to request a two-year employment record along with
references who can verify your employment. More cautious lenders may also ask
for your university transcripts to verify whether all the detail you provide
them upfront is legitimate.
Income Proof
Two
recent payslips are the typical request from a borrower but it is not uncommon
for lenders to also request tax returns, especially for people who were self-employed
for a while. This check is very rigorous because discrepancies that arise here
are likely to be major red flags. Recipients of social security, child support,
and other such alternative income streams will also have to provide relevantly
documentation and be prepared for follow-up questions if these documents are
not in order.
Assets
Lenders
not only want to know what assets the borrowers own but also where they have
come from. This is so that they are assured that they are not borrowing funds
for a down payment or to pay off another debt, which are both signs of low
reliability. For large enough assets, borrowers might have to procure gift
letters, and they will also have to abide by any and all restrictions laid down
by the borrower when it comes to spending the money for a particular purpose.
Past and Present Debts
The
borrower's credit report will have a detailed account of the debts they have
taken up, which will be used to calculate the debt to income ratio. In this
stage, disputed debts that do not exist or have been resolved may also be
considered if they have not been erased from the credit report before applying
for the loan. Credit issues in the past, as well as, credit inquiries and
repayment records will be looked into to determine how reliable a borrower is
as well. Lenders may also ask if there are new debts that have not yet shown up
on the credit report.
Lawsuits
As
per https://www.investopedia.com, applicants are asked whether they are part of
any ongoing or upcoming lawsuits because this may indirectly have a bearing on
financing, especially if a verdict goes against them in the near future. They
may request to speak to legal representatives to get a hold of a borrower's
situation before deeming them fit to lend to.
Divorce
Divorce
is a mentally and emotionally harrowing process but could also cause financial
issues due to the possibility of paying alimony, child support or being
responsible for the debt taken on by an ex-spouse. These are causes of concern
for lenders and are likely to be brought up in the approval process.
Ethnicity
The
US Department of Housing and Urban Development or the HUD has placed enough
safeguards in place to ensure no discrimination on ethnic grounds is done by lending
institutions. That said a part of this process involves lenders asking about a
person's ethnicity so that it becomes part of the official record and can be
reviewed by the HUD in the future. This is done so they can isolate and
identify agencies that turn down or try to exploit minorities by charging them
higher fees or giving them unfair terms.
Conclusion: Questions about
Your Credit History Are Most Common
Your
credit score seems to be a crucial part of the online loan application process.
Lenders would be examining your report for checking for credit inquiries and
all past credit-related issues. Suppose you are having multiple recent
inquiries, you may be asked by lenders questions such as have you taken out new
credit cards? Lenders would be grilling you and asking you to answer various
credit-related questions.
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Created on Jul 29th 2019 00:52. Viewed 485 times.