Useful Terminology Associated with Mortgage Loan Processors
Mortgage loan processors and originators work to ensure that loans are handled in a timely manner. This often includes gathering information, accurately packaging home loans, and working with lenders to input correct data into the system. While loan originators or officers often get the loan agreement started, it is a processor’s responsibility to follow through with closing documents. This means making certain that all documentation is handled, and everything complies with the lender’s policy. Here are some useful terms that are often addressed by mortgage loan processors and officers.
Adjusted Basis – This refers to the cost of a property, in addition to the value of any capital required for home improvements or expenditures that may apply. Any property depreciation is subtracted from this amount.
FHA Loan – A home loan that is insured through the Federal Housing Administration. This type of loan can be obtained by anyone who qualifies, but there are limits to the amount of money you can borrow. This type of loan is generally for moderately priced homes.
Subprime – This refers to loan or credit arrangements that pertain to borrowers with bad credit or a poor credit history. These borrowers often have high interest rates, which are unfavorable for mortgage loans.
Fixed Interest Rate – An interest rate that applies to the life of a loan, regardless of whether it is for a commercial property, residential home, or other expense. This rate determines how much money you pay to interest each month, but does not change.
Margin – The amount of money a lender adds to the index, which applies to an adjustable rate mortgage. This amount of capital is added to establish the adjustable interest rate.
Mortgage loan processors are professionals that are responsible for processing mortgage or home loans. These processors typically work in an office environment, and review applications in order to verify information and gather other data on the applicants. This way they can put together a package of information and application documents to be sent to an underwriter, who will then review the documents in order to see if the applicant is a good candidate for a mortgage loan.
When a licensed real estate broker has a client that is interested in a home, this does not necessarily mean a bank will lend them money for a mortgage. There is a conventional process with a loan application that must be completed first. This means that real estate brokers cannot simply close on a home and write up a contract. Financing is the most crucial aspect of home buying. Unfortunately not everyone is approved for a loan, which is typically due to their credit score. However, subprime loans are sometimes given, which are typically referred to as the second-chance or risky loans. Then there are FHA loans, which commonly have the lowest fixed interest rates. As you may know, banks will often outsource in order to get funding for some loans.
In order to acquire more information on mortgage loan processors, the lending process, and the current cost or rate of financing for homes, you should speak with a processor near you. There are likely office or company locations in your town or city. Just so you are aware, this is a major commercial business that involves a significant amount of paperwork and sometimes fees.