How Pre-Underwriting Help Lenders Boost Their Bottom Line?
The lending industry has evolved at a rapid pace, especially since the new rules came into existence. As a result, business of lending has become highly complex as well as competitive. The lenders are struggling to expand their business and continuously look for innovative ways to reduce time and cost associated with each loan file.
In an environment besieged with cutthroat competition, lenders emerge as winners because they not only have access to funds, but also have the authority of underwriters to distribute it as they please. However, the lenders need pre-underwriting as an added layer of security to find insincere applicant among the sincere ones. With the help of this process, they are able to check each mortgage application more thoroughly and perform stricter due-diligence before the files moves forward.
Benefits of Pre-Underwriting
Pre-underwriting may seem like an unnecessary additional step. However, it helps recognize qualifying factors for each loan application. In fact, pre-underwriting also helps weed out all the applications from the mortgage pipeline that have no scope of being funded. This means a mortgage lender will have tighter underwriting process, focusing only on those applications that qualify for home loan.
In fact, not only lenders eagerly use pre-underwriting, even prospective home buyers go the extra mile and get themselves pre-authorized. Lenders offer pre-authorizations to a borrower as a tool that puts them in a better negotiating position with the seller.
What Loan Modification Can Mean for your Business
The main objective of loan modification is to ensure that the homeowner stays in his home and the lender receives his monthly payments consistently. This objective is achieved by altering the mortgage terms so that they are sustainable by the borrower.
It is beneficial for not just the borrower, but also the lender who wants to avoid going through foreclosure.
Having said that, let us discuss benefits of pre-underwriting that can help lenders beef up their bottom line:
- Pre-underwriting validates the asking price of the property by using market capitalization to determine its value. This data is obtained from property appraisers, among other sources, helping in eliminating false listings. At the same time, it also helps the lenders in negotiating listing prices with home owners who believe that their property is worth a lot more than its actual value.
- Through this process, lenders are able to get comprehensive outlook into the borrower’s credit report. They are also able to obtain meticulous feedback of applicable credit issues. This allows them to remove any borrower from the loan process who has high propensity to default.
- Meticulous review of the title report gives lender an objective insight in to the property’s clear title. It also ensures that it is free of all claims, liens and disputes that can arise at a later stage.
- Reviewing entire loan file before sending it for further handling helps identify anomalies early on the process. It can also recognize potential frauds on a borrower’s behalf. Preventing these issues at the onset are extremely crucial for the lending business to stay profitable.
- Pre-underwriting can beef up profit margins and increase competitive edge in the mortgage market by improving quality of loans disseminated.
If pre-underwriting is the way forward in reducing average costs associated with loan processing, roping in an experienced partner like Expert Mortgage Assistance, is always the step in the right direction. With experience comes the required expertise to improve your bottom line and this is what we bring to your pre-underwriting process in ample measure. We take pride in being one of the most reliable provider in outsourced mortgage services, with specialization in underwriting and pre-underwriting processes. Discuss your requirements with us today and let us help you streamline your business.
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Common Loan Closing Types
- Mortgage Closings
- Refinance Closings
- Commercial Loan Closings
- Reverse Mortgage Closings
- Home Equity Loan Closings
- FHA Loan Closings
- Loan Modifications
Loan Closing Features
- Comprehensive review of closed files
- Aggressive pre-close review
- Confirmed Closings within 24 hours
- HUD settlement statements done within 3 hours
- Same day closings entertained