Home Loan Approval Like Baking A Cake

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Arizona home buyers familiar with baking a cake are more aware of the home loan process than they know.   The mortgage process is not not dissimilar to baking a cake.  Let’s look at how the home loan Pre-Qualification process works.

Home Loan Approval Better Batter is Better

Your home loan officer is tasked with finding the right loan product for you.   In addition, they request documentation needed for full loan approval.  Furthermore, they submit your loan application to underwriting for final loan approval.

The slightest neglect by a Phoenix area loan officer on any aspect of a borrower’s loan file causes delays.  Buyer’s, can become frustrated with the documentation demands and probing involved with mortgage process.  Client’s often feel loan officers stop just short of a obtaining a DNA sample.

For a moment imagine your loan officer’s job is that of “chef”.   As chef, his job – bake you the perfect cake.   As your chef, the loan officer gathers all ingredients necessary to go from batter to perfect cake.   Those ingredients come in many forms.  For example:

  • Infomrmation
  • Documentation
  • Signed Disclosures

Finally, imagine a food critic tasting the cake once cooked.   They tell your chef whether the cake is acceptable or not.   The food critic in this story is symbolic of a home loan underwriter reviewing a file your loan officer submitted.

2 Way to Bake a Cake – Submit a Loan Package

A loan officer and a buyer have choices when submitting the cake batter (loan application) for final approval.

  1. Submit an incomplete batter OR
  2. Submit a complete and accurate batter

Option 1 | The Incomplete Batter

The food critic’s (underwriter’s) review of batter #1 is not good.  In fact, this cake is returned to the chef.   The food critic wants an explanation of why the cake was incomplete.  More importantly, the critic requires additional ingredients be added before they test taste it again.  This cycle repeats itself until the batter’s ingredients are complete and the cake is right.  This parallels the home loan process.  During this process a few bad things happen:

  • Valuable time is lost
  • Closing late is more likely
  • Client’s patience dwindles
  • Frustration levels rise

Option 2 | The Complete Batter

The chef (loan officer) in this scenario requests a complete list of ingredients up front.  More importantly, the chef includes all ingredients go into the batter prior to baking the cake.   By the time the food critic forks the work of art, everything called for in the recipe is in the cake.  Not surprisingly, the cask passes the food critic’s (underwriter’s) taste test after the first submission to the oven.

The complete batter approach saves repeated submissions back and forth into the oven and to the food critic (underwriter).  This is a much better way to make a cake.  Much like baking a cake, fully documented loan files submitted to underwriting allow borrowers to enjoy a smooth surprise free home loan experience.

In conclusion, bake a great cake by submitting a good batter the first time!

By Jeremy House


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