Mortgage Underwriting Tips - 5 Steps to Ramp up Your Closing Rates

Some brokers see lead gen and sales as the thing that can make or break their business. While it is true that without customers you have no business, the real aspect of your job that can make or break your success is in fact mortgage underwriting.

Not only does poor underwriting lead to more time and resources wasted on bad deals but it also leads to low closure rates which can damage relationships with larger institutional lenders like banks.

FIs monitor closure rates closely because the operational cost of their massive underwriting department working on deals that don’t close is incredibly high. FIs have even taken great measures in implementing tools and technology to verify even more information at the application stage for this reason.

Ramping up your closure rates make you more efficient, productive, and profitable, able to offer a better service and this all leads to stronger relationships. Improving closure rates means enhancing your underwriting process to ensure that more questions and verifications occur at the application stage.

Improving closure rates means looking at the common reasons deals fail and knowing how to verify the information points to identify issues with deals before you submit them.

Does this mean that every time something comes up your deal is over? No. What it does mean is that if something does come up you can ask your client about it and be better positioned to gather more documents and to be able to fight for the deals worth fighting for.

Submitting a deal where the lender uncovers things that you didn’t tell them because you didn’t know (or did) is entirely different from submitting an application with an explanation and supporting documents with respect to issues that you have uncovered and disclosed with the application.

Some examples:

1.      Other people coming up on title – verifying who the legal homeowner is on refi’s especially will eliminate this issue.

2.      Undisclosed mortgages – verifying registered encumbrances on title.

3.      Misstated mortgage balances – if the mortgage balance registered is twice as high as what the client said, and it was registered last year, this is an opportunity to find out from your client why they think their home is worth so much more.

4.      Discrepancies in property description – sometimes people misstate the size, numbers of rooms and condition (e.g. finished basement) and other features of the property. Checking into this first stops appraisal or AVM surprises if your bank like many other banks is using AVMs

5.      Discrepancies in sales history – a property that has changed hands too many times in a short period of time could present an issue.

6.      Discrepancies in value – people often don’t know what their home is actually worth.

These steps are important not because your clients are devious or want to get one over on you. These steps are important because many clients don’t even know what their home is worth or what they owe on their mortgage. The great thing about verifying this information first is that it could go the other way too.

Perhaps you realize there is way more equity or the client owes less on their mortgage. Now you can upsell the client and possibly submit an even bigger deal that makes even more sense for the client and lender.

We hope that this blog has been helpful to give you basic know-how and ideas of what kind of information you can look into to ramp up your closing rates.

Purview For Mortgage Brokers has the tools that make verifying information easy. Strengthen your closure rates and your relationships - call us today at 1.855.787.8439.