Check your understanding

Check your understanding of key concepts before moving to the Do It Yourself section.

Indicate whether each statement is True or False.

1. There are four possible underwriter decisions about your loan application: approved, approved with conditions, suspended, denied.

Correct! The statement is true. There are four possible decisions about your application: approval, approved with conditions, suspended or denied.
Incorrect. The statement is true. There are four possible decisions about your application: approval, approved with conditions, suspended or denied.

2. More documentation is required only when the underwriter’s decision is “suspended.”

Correct!T he statement is false. In most cases, an approved loan application will be “approved with conditions.” Many of the common conditions require that the borrower provide more documentation.
Incorrect. The statement is false. In most cases, an approved loan application will be “approved with conditions.” Many of the common conditions require that the borrower provide more documentation.

3. Once you have signed your loan documents no further information will be requested.

Correct! The statement is false. When you sign your loan documents, you should get a copy of the list of all remaining conditions from the closing agent and assure yourself that someone is handling all of those items so your loan funds on time.
Incorrect.The statement is false. When you sign your loan documents, you should get a copy of the list of all remaining conditions from the closing agent and assure yourself that someone is handling all of those items so your loan funds on time.

4. Make sure any errors on your credit report have been corrected, since the report is often pulled again just prior to closing.

Correct! The statement is false. The credit report is always pulled again just prior to closing.
Incorrect. The statement is false. The credit report is always pulled again just prior to closing.

5. Every loan program offers lock periods of 15, 30, 45, and 60 days. You must pick the one that matches your closing date.

Correct! The statement is false. You can choose a lock period that is shorter than your escrow period. However, interest rates can change rapidly, so it generally makes sense to lock in right away and avoid the risk of having increased interest rates.
Incorrect. The statement is false. You can choose a lock period that is shorter than your escrow period. However, interest rates can change rapidly, so it generally makes sense to lock in right away and avoid the risk of having increased interest rates.

6. Your lender is legally bound to send you the Lock Confirmation within 3 days of locking in your interest rate and terms.

Correct! The statement is false. The lock confirmation is not customarily sent to borrowers, but it is the only way to verify all sources of origination fees, borrower names, loan terms, the interest rate, and the date and length of lock. With the lock confirmation you can verify that your loan representative has honored the agreement you were originally offered.
Incorrect. The statement is false. The lock confirmation is not customarily sent to borrowers, but it is the only way to verify all sources of origination fees, borrower names, loan terms, the interest rate, and the date and length of lock. With the lock confirmation you can verify that your loan representative has honored the agreement you were originally offered.

Practice what you learned Do it yourself

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