Chapter 17: Submitting the Application and Obtaining a Commitment

1.      List the typical items that must be explained in the notes section of an application and provide an example of each.

The areas to review is Credit, Property and Employment

2.      To how many Lenders should a Mortgage Agent submit an application at the same time?

Only one.

3.      Discuss the impact of funding ratios on a Mortgage Agent.

If a Mortgage Agent doesn’t have appropriate funding ratios Lenders may decide to stop doing business with him or her.

4.      What is the most common complaint by Underwriters when referring to mortgage applications?

The lack of notes.

5.      List ten pieces of information that are commonly found in a commitment letter.

·         Applicants’ Names

·         Property Address (address of the security)

·         Mortgage Amount

·         Interest Rate

·         Payment Amount

·         Payment Frequency

·         Term

·         Closing Date

·         Prepayment Privileges

·         Conditions of approval

·         Terms of the approved mortgage (such as fees, appraisal requirements, etc.).

6.      What types of documentation might a Commitment Letter require as proof of:

a)      An employed individual’s income?

Income and employment confirmation by way of recent pay stub or a letter from employer confirming income and length of employment on employer's letterhead and the most recent income tax Notice of Assessment. 

b)      A self-employed individual’s income?

A copy of three (3) years income tax Assessments and Financial Statements;

7.      What options does a Mortgage Agent have if his or her client’s application is declined by the Lender?

·         Contact the Underwriter to understand why the application was declined

·         Contact the BDM if he or she disagrees with the decision

·         Submit the application to another Lender