A borrower calls and provides verbal information about their income, debts, and down payment. Based on this information, the MLO tells them they could qualify for a $300,000 loan. This process is best described as:
Correct Answer
B) Pre-qualification
Pre-qualification involves providing an estimate of loan amount based on unverified, self-reported information from the borrower. No documentation is typically required, and the estimate is not binding on the lender.
Why This Is the Correct Answer
Pre-qualification involves providing an estimate of loan amount based on unverified, self-reported information from the borrower. No documentation is typically required, and the estimate is not binding on the lender.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
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