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[O203]Online Home Loan Approval

by Carrie Reeder, Car

“Instant Approval For Home Loans” is a common refrain for online mortgage lenders, but sometimes instant is longer than you think. During regular business hours with a typical application, you can expect the databases to approve your application almost immediately. However, any glitch in the system will require the intervention of a person, which adds a time delay.

The following lists the most common reasons for a delayed mortgage application. While you can prevent some of these delays, most are caused by the mortgage lender's system. So just because your mortgage application is delayed, don't assume it has been denied.

Complete The Application

Many applications are returned due to incomplete information. Start the application process by collecting all your financial and employment records, so you have the information on hand. After you have filled out the forms, double-check it for partial names and addresses before you press the submit button.

Details Count

Approvals of mortgage applications are based on databases communicating with each other. You enter your address on the site and the mortgage lender verifies the information from several different sources. If there is a discrepancy between the information, the mortgage lender's system will flag the application for review.

You can try to avoid this delay by making sure address and names are complete. However, if the information was entered into the database incorrectly by a third party, then you will have to wait for a review.

Changes Take Time To Catch Up

If you have moved, changed jobs, or made any other significant changes to your personal or financial situation, it probably won't show up in the databases yet. Put your current information on your application, but expect a delay as the information is double-checked.

Database Delays

Databases are wonderful devices when they are working. However, databases need maintenance, repairs, and upgrades. These downtimes usually occur late at night or early morning, and sometimes during business hours.

Waiting Out Delays

After one business day, if you can't wait, contact the mortgage lender either through email or over the phone to check the status of your mortgage application. A customer service representative will be able to tell you the reason for the delay and the time it will take for your application to process.

If you have tried to apply for a mortgage loan, you probably have come across the term called FICO. Even if you have not heard of it, rest assure it is used every time you look to secure a mortgage loan. It can determine whether or not your loan application is approved and also the interest rate you pay.

So what is FICO?

FICO are sometimes referred as credit scores. It is a computerized software model developed by Fair Issac Corporation (FICO) to determine credit scores. Think of it as your personal financial score card, only that it is rated by a lending institution or company.

They will assign you a credit score based on an analysis of your credit history. It is then entered into a computer. Most major credit reporting companies such as Equifax and Trans Union uses the FICO model. Mortgage lenders then use your credit score to determine whether or not your loan is approved and the interest rate you pay.

You should note that not all credit reporting companies uses the same software so your FICO score may vary at each of them.

So what are the factors in determining your FICO score?

There are many factors used to determine your credit score. Examples are amount owed, types of credit and your payment history. I will try to break down the factors by percentage but do note this is just an estimate since not all credit companies rate the factors the same percentage.

1. Payment History

As much as 35% of your FICO score is determined by your payment history. Your records such as late payment of credit cards or previous loans and the length of time overdue will adversely affect your credit score.

2. Debt To Income Ratio

This accounts for 30%. How much you owe versus your income level can determine your FICO score in this area. Obviously, the more you owe and the less income you have, the lesser chance of your mortgage loan being approved.

3. Length of history

This accounts for 15%. Mortgage companies will check how long your accounts have been open and the amount of activity. So the longer and better your credit history, the better chance of scoring high in this area.

Other factors in determining your FICO score include the number and types of accounts you have, credit card balances, number of credit cards you have etc.

As you can see above, the best way to improve your FICO score is to practice proper financial management. Make sure to pay your credit card bills and loans on time and keep your credit card balances low. It does take time of course.

Article Source : Pg. 319

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Both Carrie Reeder & Kb Lim are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Carrie Reeder has sinced written about articles on various topics from Finances, Mortgage and Finances. . Carrie Reeder's top article generates over 135000 views. to your Favourites.

Kb Lim has sinced written about articles on various topics from Mortgage, How to Sell on Ebay and College Student Loan. Dan Lim is the online editor of where you can find a large respository of. Kb Lim's top article generates over 9900 views. to your Favourites.