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The Mortgage Approval Process: An Interview with Aaron Thompson of Legacy Mortgage

By Aaron Thompson

Tell us a little bit about your company and its foundation.

Legacy Mortgage is a locally owned and operated home loan lender. We pride ourselves in giving you the mortgage information, loan options, and convenient assistance you are looking for in a purchase or a refinance.

What are some important questions to ask your mortgage consultant before applying?

Before applying for a mortgage, interview your Mortgage Consultant with the following important questions:

  • Are you licensed?: recent Lending and Banking regulations require only some Mortgage Consultants to be licensed. This means that you may be speaking to a Mortgage Consultant that has not been through the background check, credit report check, 20 hours pre licensing course, and passed the State and Federal test. Mortgage Consultants at national banks and credit unions are not required to complete these, while private lenders such as us are. This benefits our customers by having a trusting relationship with a Mortgage Consultant that has completed these items.
  • Do you have an application fee?: some lenders require a customer to pay a fee upfront in order to apply for a loan. We do not have this as we do not want to charge our customers to possibly find out that they do not even qualify for a loan.
  • How are you paid?: some lenders pay their Mortgage Consultants with a salary. Here at Legacy Mortgage, we are strictly commission. This benefits the customer because we are always in your corner. We do not get paid until you close on your home. It makes sure we have skin in the game to keep your transaction running smoothly and on time. Someone with a salary position may only work salary 8-5 hours. Whereas, someone that is commission based will work after hours and weekend?ironically, when a customer actually needs them.
  • Where will my loan be processed and underwritten?: local processing and underwriting allows for a more "control" feel for a customer. Their loan file isn't being shipped out of state and put in a stack with other loan from all over the country. Local processing allows for questions to be answered immediately versus calling an 800 number and speaking to someone you have never met. Local underwriting has two major benefits. One being that they have a local understanding of the market and two being that this usually allows for faster turnaround times.
  • What are your average approval times: as just mentioned above, local processing and underwriting has the ability to provide approvals within a couple of weeks. The industry average is 30-45 days from start to finish, but some files may be more complicated than others due to the customer's profile and could add to its length. The normal file approval window should fall within the industry average as long as the customer is attentive to the getting the lender the proper documentation in a timely manner.
  • Are you available on weekends: most lenders, especially those that are salary, do not work on weekends. Having a lender that is available on weekends to answer questions and do a prequalification application works in your favor as this is typically the time when a buyer would be looking at houses.
  • What loan programs do you offer: lenders do not offer the same programs. Places like Legacy Mortgage has relationships with many investors that allows us to shop for you and offer all the programs in a one-stop-shop setting. Most lenders/banks only offer their specific programs. So if a buyer does not fit their specific box of programs, they are denied for a loan. With us, we have a large amount of programs to offer to open the possibility for a borrower to qualify for at least one loan program if not more.

If you could, please walk our readers through the general mortgage approval process:

  1. Pre-Qualification: Mortgage Consultant determines maximum qualified mortgage amount and loan program options available.
  2. Application:Borrower and Mortgage Consultant complete either by phone, internet or in person, credit and income initially reviewed. Documentation is gathered and/or needs list provided to validate approval.
  3. Processing:
    • Residential history verified
    • Credit history verified
    • Assets reviewed and verified
    • Tax returns reviewed and verified
    • Income is verified
    • Employment is verified
    • Other: VA certification, letters of explanations, etc.
  4. Underwriter Pre-Approval Subject to Appraisal: At this point, loan has been pre-approved, only waiting on receipt of appraisal and any outlining conditions.
  5. Final Approval and Package Sent to Closing Department: Appraisal has been received and all conditions reviewed and approved by underwriter. Closing department works up figures and sends instructions to the title company who prepares the HUD, TIL, etc.
  6. Loan Closing: Borrower signs final loan documents at a title company, provides certified funds for down payment. Borrower is proud homeowner once loan has funded and recorded.

How can clients prepare for this process.

The best way to prepare is to meet with a mortgage loan officer 2-3 months before actually purchasing a home as a "fully approved" borrower is viewed as the equivalent of a "cash buyer" in the seller's eyes which will not only aid you in the getting the home of your dreams, but making sure that you are not only in your "qualifying" range, but equally if not more important for your "comfort" range.. This allows a client enough time to get all the ducks in a row. Every situation is different and doesn't fit the box every time. Therefore, the licensed loan officer will give you a checklist of everything that needs to be completed upfront so the client is better prepared for the process.

What are some common issues you face when it comes to approving a mortgage?

The most common misconception is that borrowers do not understand that it is not just about credit score, but their entire credit history. A good rule of thumb is to make sure there isn't anything derogatory in the last 12 months. There are many items on a credit report that must be handled before closing on a home loan such as: tax liens, judgments, seasoning requirements, collections, etc. The other most common issue is large deposits. We must source every penny in a customer's bank account especially for the down payment. If there is a "cash" deposit without a paper trail, this can be a deal killer in a transaction.

What's the best way for people to get in contact with you?

People can reach me by phone, email or text. This is a business of "NOW". Making communication easy and available is the best way to capture the buyers that are actively looking.

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About The Author

NMLS # 249314

Phone: (505)977-6699

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