Chapter 17: Submitting the Application and Obtaining a Commitment

Question 1

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

Answer 1

The areas to review are Credit, Property and Employment.

Question 2

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

Answer 2

Only one.

Question 3

Discuss the impact of funding ratios on a Mortgage Agent?

Answer 3

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

Question 4

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

Answer 4

The lack of notes.

Question 5

List 10 pieces of information that are commonly found in a commitment letter.

Answer 5

• Applicant’s Name
• Property Address
• 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)

Question 6

What types of the documentation might a Commitment Letter require proof of:

• An employed individuals income
• A self-employed individuals income

Answer 6

Employed Individual

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

A self-employed individuals income

A copy of 3 years income tax assessments and financial statements

Question 7

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

Answer 7

• 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