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Loan Officer Training part 2 - how to take an effective loan application and the importance of building rapport

By Edited Nov 13, 2013 0 0

Now that you've established the purchase price of the property, zip code, property type, etc you want to move immediately into the next part of the loan application.  It's crucially important that you do not hesitate when moving from one topic or piece of information to the next.  Your conversation with the customer should flow naturally and effortlessly from one one point to the next.  Remember to interject humor and positive feedback whenever the opportunity presents itself.  Your goal is to look for ways to create rapport with your customer.  The more rapport that is built between you and the client and the more that your customer trusts you, the better your chances of locking the loan. 

It is always important early in the conversation to establish that you have a good number to call the customer back on in case you are disconnected.  A good way to ask this is "What is going to be the best number to reach you on going forward?"  You should have already established the customer's name but always have the customer spell their name for you and then you should repeat the spelling back to them so that there are no errors.  A misspelled name on the preapproval or prequalification letter you send the customer shows them that you are not detailed oriented and this could hurt your chances of locking the loan.  Remember that thoroughness is one thing that will separate you from your competition so make sure you are thorough.  Ask the customer if they like to include their middle initial on the application- thorough.

Next, you want to determine the customer's citizenship.  Never ask your customer, "what's your citizenship?"  This is vague and could be difficult for the customer to answer correctly.  You should always give the customer choices to make it easy for them to answer correctly.  Giving choices not only increases accuracy but also speeds up the application process.  The correct way to determine citizenship would be for you to say: "Regarding citizenship, are you a U.S. Citizen, Permanent Resident Alien, Non-Permanent Resident Alien, or Non-Resident Alien."  Choices make it easier to answer correctly and make the application a more pleasurable experience which the customer will remember.  Everyone will know if they are a U.S. citizen as this is not an easy process to go through.  You will however encounter some people that do not know their current citizenship classification.  A simple way to determine the correct citizenship for someone who is not a U.S. Citizen is to ask, "do you have a green card?"  Someone with a green card is a Resident Alien.  Someone without a green card will be either a Non-Permanent Resident alien (authorized to work in the U.S. typically on a work visa like an H1-B) or a Non-Resident Alien sometimes referred to as a Foreign National.  U.S. Citizens, Resident Aliens and Non-Permanent Resident Aliens will typically be eligible for financing while Non-Resident Aliens or Foreign Nationals typically will not.  If your customer is not a U.S. Citizen you will need to input their country of citizenship and typically will need to input a permanent foreign address.

Next, you want to ask the customer their social security number.  There should be no hesitation when asking for the customer's social security number.  It is merely part of the application and should be treated as such.  At times, you will hear "why do I need to give you this?", or "do you need this to give me a rate quote", or "I don't feel comfortable giving this information over the phone".  If your customer objects to giving their social security number it is important that you commucite the importance of this information.  A good response to this would be, "this is something that I need to determine if you qualify."  Every now and then you will encounter a customer that for whatever the reason simply will not give you their social security number.  In this case it is best to simply move on to the next customer.   

Next, determine the customer's marital status.  Again, give choices.  "Are you Married, Un-Married, or Separated."  You should never ask, "are you married?"  This could be taken the wrong way and could make your customer feel uncomfortable. 

Next, you should ask the customer if they are a Veteran.  If they are, be sure to thank them for their service to the country, they will appreciate you saying this.  If your customer is a Veteran you should almost always look to do a VA loan as few loan products are as good as a VA loan when taking into consideration being able to do 100% financing with no mortgage insurance.  If your customer is a Veteran make sure you offer this as one of your loan options.  Also, remember to ask if you customer has any service related disabilities.  A service related disability could exempt them from the VA funding fee so be sure to be thorough and ask the right questions.

Finally, after getting the customer's date of birth and years in school, you will need to enter the customer's address history for the past 2 years.  After inputing the address, you should ask: "do you own, rent, or live with relatives."    If they rent, ensure you enter the amount of the rent.  The rental payment will be examined to not only determine the customer's ability to consistently make a housing payment but also to determine if the customer will experience payment shock.  Payment shock is when the customer's new mortgage payment is significantly more than their current housing payment.  Payment shock will be examined closely by Underwriting.  Tip, always remember to enter the customer's complete address history for the past 2 years.  You should never leave it to processing or Underwriting to do this for you.  It only takes a few extra minutes of your time so ensure this is done correctly to ensure your loan moves quickly through the Underwriting process. 

The next part of the application will deal with analyzing the customer's credit report.

 

 

 

 

 


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