For the prior segment of this video introducing the role of the transaction agent as a gatekeeper to ensure their buyer negotiates the best financial advantage available, click here.

Guidance and advice

As part of the transaction agent’s advice and guidance in the mortgage application process, the transaction agent instructs the buyer regarding:

  • the expectations held and the role of each servicer provider involved in the mortgage transaction. This includes the lender’s representative, the appraiser, any mortgage broker involved, etc.;
  • what is going to take place during the application process, such as delivery of lender disclosures, payment of lender costs, etc.; and
  • what to guard against, such as excuses which may be made by the lender to justify an increase in rates at the time of closing.

Documents the buyer needs to gather and submit to the lender to process the mortgage include:

  • W-2s or other tax documents for the self-employed;
  • recent bank statements; and
  • recent pay-stubs to evidence the employment information represented by the buyer in the mortgage application.

Lenders also need to verify and review:

  • an appraisal report to establish the value of the property serving as security;
  • the buyer’s bank deposits or tax returns to establish their income and assets; and
  • a credit report to establish the buyer’s liabilities and propensity to repay debt.

When it becomes time for the buyer to submit a loan application, it is recommended they do so with at least two lenders. The different types of mortgages, rates and fees available from different lenders all play a critical role in the sum of money a homebuyer will ultimately pay to finance their purchase. The difference between one lender’s offer and another’s can easily equate to tens of thousands of dollars over the life of a mortgage. No two loans originated by different lenders are the same.

Related article:

Homebuyers pay more when they don’t mortgage shop

Further, the second application is insurance against a lender’s last minute changes to the rates and terms at the time of closing. Think of it like a safety net for your buyer’s biggest financial decision.

To this end, the Mortgage Shopping Worksheet is designed to be completed by the buyer with the assistance of the transaction agent. [See RPI Form 312]

The worksheet contains a list of all the mortgage variables commonly occurring on origination and during the life of the mortgage.

After submitting mortgage applications to two lenders and learning of the terms offered by each, the buyer will possess all the information needed to fill out a Mortgage Shopping Worksheet covering all lenders.

Once complete, the buyer and transaction agent can clearly compare the terms offered by the competing lenders and close with that lender that offers the most favorable terms. [See RPI Form 312]

Keep in mind that obtaining mortgage pre-approvals and submitting applications to multiple lenders will not have an adverse impact on a buyer’s credit score. This is the case so long as the buyer conducts all of their mortgage inquires for comparisons within a 45-day period.

Related article:

The Mortgage Shopping Worksheet — assist your homebuyer to close with the most competitive lender