Tips for Mortgage Brokers
Communication between brokers and lenders is essential for successful mortgage transactions. In order to make the mortgage magic happen, your underwriter needs to know your deal almost as well as you do. Providing your underwriter with clear, concise explanations up front can be the easiest way to ensure your file is underwritten quickly and accurately.
Here are 5 things your underwriter always wants you to explain when you submit your deal:
1. Credit: Squeaky clean credit needs no explanation, but if your client has missed one or more payments, let your underwriter know why, and let them know if the issue has been addressed.
Dealing with a credit-challenged file? Explain all credit issues from the outset along with anything that’s been done to repair the credit so far. If you’re arranging a short-term mortgage to address the credit issues, provide your underwriter with a clear exit strategy for your borrowers.
2. Use of Funds: Are you helping clients with an equity take out? Let your underwriter know what your clients plan to do with those funds. Whether your borrowers are planning to pay off unsecured debt, invest, send a child to university, or renovate their home, your underwriter needs to know.
3. Down Payment: Whether your borrowers are first-time buyers or purchasing their fifth rental, let your underwriter know the source and amount of the down payment. This is a critical detail that is often left out of submissions, and omitting it can lead to unnecessary back-and-forth when time might be of the essence.
4. Marital and Residential Status: These may seem like small details, but leaving them out of a submission can cause a headache or two. Unsure of marital status or residential status when the time comes to hit the ‘submit’ button? Address it in your broker notes. The key thing is not to leave it out of a submission without an explanation.
5. Other Income: When submitting a file with unusual or ‘other’ income, make sure to let your underwriting team know the source of that income, and what you intend to provide to show it. It might be pension income, investment income, Canada Child Benefit, or rental income, but whatever the source, include an explanation when you submit.
Details can sometimes make or break a file, but even brief explanations can save the day!