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 483 times.

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