Will Borrowers Benefit From New Mortgage Application Form?

New Mortgage Application Form -- OurBroker.comFor the first time in 20 years borrowers will soon face a new mortgage application form, seven pages of questions, acknowledgments and declarations designed to make the lending process quicker and easier in the electronic era.

Press here for your copy of the new mortgage application form.

Is it really better? Will it result in more loans, lower rates or happier borrowers?

There are some borrower benefits with the new form, a form which will be used as of January 1st, 2018.

First, Fannie Mae and Freddie Mac get points for introducing a form which is fairly plan and straight-forward. The form can be completed on a computer with a minimal amount of fuss.

Second, in a bow to the Internet era, the form asks for the borrower’s work phone, home phone, cell phone and email information. Back in the Loan Originator Information area on page seven the form asks for the loan officer’s email and phone number. However, it is unclear if the lender’s nine-to-five phone number can be used or the loan officer’s cell phone number. This is a big deal when a borrower needs to contact a loan officer after business hours or on weekends. Be sure to get the loan officer’s cell phone number, regardless of what the mortgage application form says or means.

Third, the application shows the lender and loan officer license ID. Borrowers can check this information online.

Mortgage Application Form

Fourth, lenders still have the option to use paper forms. Why? According to Fannie Mae and Freddie Mac, they “serve the entire mortgage industry from the smallest bank to the largest, most sophisticated lending and servicing operations. We have heard from many small- to mid-size lenders and credit unions that they still need a paper form to collect and present loan application information from and to the borrower.”

Mortgage borrowers should get a copy of the new form because it can make the application process far easier.

I know this sounds like homework, but trust me, your loan application is most likely to fly through the system if you take this step: Download the application and fill it out. Not for a lender, but for you.

As you go through the form you’ll see that it’s not scary at all. You will also see that it asks for various pieces of information. As you complete each section you will have in hand the basic data and information wanted by any lender.

Hang on to the form. Create folder with all the accounts and paperwork needed to document what you have written on the form, such things as bank statements for the past two or three months, payroll stubs for the past 60 days, tax returns for the past two or three years, etc. Update the folder as new documents come into your household.

Now — with a completed form and documentation in hand — it should be very easy to complete the loan application process.

Lower Mortgage Rates?

Will the new form really result in more loans, lower rates or happier borrowers?

Fannie Mae and Freddie Mac say they “do not prescribe how the lender should interact with applicants or process loan application data.” Translation: Approving mortgage applications is up to loan originators.

That said, with better clarity the new forms should speed the approval process and that’s good. Because the forms are clear, it may be that more loans will be approved. As to mortgage rates, the forms won’t have much impact there — but shopping around for the best rates will.

(Photo courtesy of Qusai Akoud)

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