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Correcting mortgage application errors can prevent delay in the application's processing. It is important to know which types of errors can affect the processing or possible disqualification of a mortgage application.
Types of Errors
When submitting a mortgage application, the applicant should pay close attention to the information he or she is providing to the lender. The information provided on an application is used to determine the amount the lender will lend. Smaller errors, such as a wrong phone number, address or date, can be corrected and do not usually hold up the processing of an application or affect the amount of the loan. Below are some of the larger errors that can delay application processing and/or disqualify an applicant.
Social Security Number/Tax I.D.
In order for a lender to verify an applicant’s financial history, a valid Social Security number or tax I.D. number is necessary. These numbers help to verify who the applicant is. If this information is incorrect, it can be interpreted as fraud or intentional dishonesty.
While lenders use the Social Security number to verify financial history, an applicant is also asked to disclose information pertaining to his or her credit on the application. If an applicant does not disclose all information that has affected his or her credit, it could disqualify the applicant for the loan.
Applicant income is a basis on which the lender can approve the loan amount. Misstating or misrepresenting a source of income and/or employment can reduce the amount of the loan that the lender is able to qualify the applicant for.
Mortgage applications require the applicant to list references. These references range from personal to business. These references help lenders verify certain information provided by the application. Providing incorrect information that the reference cannot verify can result in disqualification.
Correcting the Errors
As previously mentioned, there are several different types of errors that applicants make that can delay application processing or disqualify him or her for the mortgage. It is the responsibility of the applicant to ensure that all the information is correct. Prior to submitting the application, an applicant should review all the information and provide all documentation to verify information provided.
If an applicant notices an error after submitting the application, he or she should request that the application be withdrawn and to resubmit it. Requesting a withdrawal will allow the applicant to make corrections without being penalized. It is best to review the application in its entirety prior to resubmitting it to ensure that there are not any additional errors that could affect the applicant's ability to qualify.
If the errors are found after processing, they can be difficult to correct. Since the loan is approved based on the incorrect information, it would be in best interest of an applicant to cancel the contract. An applicant should consult legal counsel if he or she feels the need to cancel the mortgage contract.
Remember, for an applicant to avoid having to make corrections, he or she should take the time to review the mortgage application thoroughly.
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