5.1 Brokers and Lenders: Telling the Difference. The lender or creditor is the party who 1) disburses or provides funds to the borrower at the end of a successful loan application process, and 2) receives the note attesting the borrower's obligation to repay. The broker, meanwhile, acts as an intermediary between the borrower and the lender and serves as the applicant's main contact throughout the process. The mortgage broker usually receives a service fee from the lender for customer services rendered.
5.2 Loan application forms: Where to Find Them. Most forms can be downloaded from a lender's website. Fill out all forms accurately and completely, and contact your lender for any questions or clarifications.
5.3 Documentation: Keeping your Papers in Order. It is highly recommended to keep an organized file containing both originals and copies of all documents accumulated throughout the entire application process. These will include:
- 2 years of W-2 forms from your employer, or 2 years of tax returns for those who are self-employed
- Recent pay stubs
- 3 months of bank and money market statements
- Brokerage, mutual fund and retirement account statements
- Proof of other income sources (alimony, trusts, rental income, etc.)
- Credit card statements
- Auto /boat / student / miscellaneous loans
- Drivers' license or form of ID
- Copies of visa or green card (for non-US citizens)
- Copies of existing mortgage debts (for those applying for a home equity line of credit or another mortgage)
5.4 Underwriting: keeping in touch. Underwriters, hired by lenders, are analysts who examine all the data from a borrower's property and transaction, and ultimately determine whether or not mortgages should be issued to the applicant. Loan approval committees will use underwriters' reports during their deliberations to evaluate the property and the applicants' creditworthiness. Your broker may contact you frequently in the course of the loan application process, so prompt communication is necessary to keep the process running smoothly.