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It's the Approval That Sellers Want to See.

You'll notice right away there is no pre in front of the word approval here. This means that not only has the 1003 been completed and verified, the credit report reviewed, and the existence of sufficient funds to close verified, but the loan has been reviewed either by an underwriter or by some type of automated underwriting system (AUS), and an approval has been issued, "subject to" certain conditions being met.

Common conditions would be things like providing enough insurance coverage to insure the home and making certain that none of the documents in the file (such as bank statements and paycheck stubs) are more than 90 days old.

This is the approval letter that your Realtor wants to see—and so do the sellers of the property that you want to buy.

The next stage is "clear to close." At this point, all conditions have been signed off on, everything is in order, the property has been evaluated, and your loan papers have been printed and are awaiting your signature. You won't ever have to worry about providing a clear to close letter to anyone, but your loan officer will tell you and your Realtor when you're at that stage.

And remember the old adage, "It ain't over 'til it's over." The last bit of approval comes when money changes hands. This stage is called funding. Your loan has funded when the home is officially yours: The keys are in your hand, and money has been electronically wired to the seller's bank account.

Using Terms Used Only in the Lending Industry Will Put Your Loan Officer on Notice That You're Not to Be Messed Around With.

If you know the words 1003, prequalification, preapproval, approved with conditions, clear to close, and funding, you've nailed down the key words that you can drop with regularity, letting everyone involved know that not only are you not a dummy, but you're also armed to the teeth with knowledge, and any attempts to pull the financial wool over your eyes will be met with more than just a typical "oh, that's okay" response.

Mortgage loan officers will treat you with kid gloves and won't try any of the tricks you'll read about in this book. They can't afford to; you speak their language.

It's also important that you know who the people in the loan process are. Some of them are important, and some are less so. But perhaps the three most important people you'll be dealing with while your loan is being approved are your loan officer, your loan processor, and the underwriter.

Your loan officer has one primary objective for her employer, regardless of whether she's working for a mortgage banker or a mortgage broker: to find new loans. She can find new loans in as many ways as in any other business, but primarily she gets referrals from Realtors, builders, and previous customers.

Another job your loan officer has is to take care of her borrowers after they apply for a loan. This can mean answering questions or helping with the approval process or providing input on which loan program to choose, but it's your loan officer who will be your contact in the early stages of loan application and loan approval.

A loan officer can go by many different titles, and it's quite possible that you'll encounter several of them. A few business titles that a loan officer might go by include:

Loan officer Senior loan officer Mortgage consultant Mortgage loan originator Home loan consultant Mortgage planner

And as many other titles as they can think up. Loan officers call themselves different things to differentiate them from other loan officers. But they all perform mostly the same duties: finding loans and guiding those loans through the approval process.

Your loan officer is the one who will help you determine which loan is best for you, quote you mortgage rates and closing costs, and also be there if any problems arise during the approval process.

If you apply in person, you will apply for a loan with your loan officer, and if you apply online, you will be assigned one. This is the person who will collect your loan documentation, such as your pay stubs or insurance or tax returns. She is also the person who will issue the initial loan disclosures that are required by federal and state governments.

It's also possible that your loan officer will have an assistant (or two if she's one of the top loan officers in your area). Loan officers' assistants are the people who handle the daily issues of collecting the information from you that is needed to close your loan and screening out any questions they can handle that would interfere with your loan officer's primary objective of finding new loans for the company.

Loan officers who make $200,000 to $300,000 or more per year use assistants in one fashion or another. They have to; there's no way they could handle all their clients and still bring in new business without them.

While that's okay, understand that if you find this heavy-hitter loan officer whom you absolutely love and who does everything super-well, you just might be handed off to one of his assistants. That's not necessarily a really bad thing, as you'll probably be handed off only after your loan has the green light. It may be a problem, though, if you find yourself being handled by an assistant who doesn't have the mortgage skills that may be needed if and when problems arise.

But once your loan officer originates your loan, prequalifies or preapproves you, and sends you for processing, you'll be introduced to the next person in line—the loan processor.

 
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