Every facet of our daily lives seems to have been enhanced by technology – phones with facial recognition security, cars that self-drive and home assistant devices that can do just about anything they are asked. But how is the mortgage process being streamlined with advances in technology? Let’s take a look at a couple ways technology is making the loan process easier by comparing them with traditional methods.
Verifying Assets – The Old Way
The buyer will need to submit bank statements from all accounts being used for the cash to close (down payment + closing costs). In addition, they need to submit statements for any account used for reserves or any account that funds have been transferred from. Transaction histories are also required to show the trail of funds transferred. For buyers with multiple accounts, transfers, deposits or gift funds, this can be a large amount of paperwork and even more time.
Verifying Assets – The New Way
No documentation needed! Using AccountChek Verification of Assets, buyers do not have to submit any bank statements or transaction histories. The loan officer simply sends an invitation to the buyer, and the buyer gives the loan officer access to view the key features of their accounts for an amount of time they specify. Then, when the underwriter requests any asset related conditions, the loan officer can generates an updated statement on behalf of the buyer.
Verifying Income – The Old Way
The buyer will need to submit pay stubs, tax returns and W2’s. For buyers with hourly, part time, commission or bonus based earnings, an employment verification will be needed to calculate accurate monthly income, which takes time to obtain from each employer.
Verifying Income – The New Way
No documentation needed! Using Day 1 Certainty and automated employment verifications, the loan officer can get income details instantly and verify them with automated underwriting systems, DU or LP. The loan officer simply gets the employer contact from the buyer to do so. Once DU/LP sees the auto verification, income is validated and no documents are needed to calculate or verify. Auto verifications are not available for all employers - which means we’ll have to verify the old way - but we’re seeing more and more jumping on board every day.
New technology is also letting buyers waive appraisals on some purchases – but you’ll want to consult with your Realtor to find out if that is a good idea. As of now, this technology is only available on Conventional loans, but it’s only a matter of time before this is the new normal.
Note: This technology may not work for all buyers, so consult your loan officer to find out if you can benefit
This post is a guest post by Sean Aguirre of American Pacific Mortgage. Learn more about Sean and contact him here.