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LOAN OFFICER KNOWLEDGE BASE

1003 / Application Knowledge Base

Learn what each major application section is trying to establish and which borrower answers require follow-up.

BACK TO KNOWLEDGE BASE

What You Need to Know

Borrower identity & residence

Capture legal name, contact/residence history and borrower identity accurately. Discrepancies can create verification, fraud-prevention or disclosure issues.

Employment & income

Capture employer, dates, position and pay structure. Salary, hourly, overtime, bonus, commission, self-employment, retirement and other income are not calculated the same way.

Assets

Identify account type, ownership, current balance, source of funds and whether gifts/transfers/large deposits require explanation.

Liabilities

Capture debts accurately and reconcile to credit. Student loans, support obligations, installment debt, revolving debt, leases and co-signed obligations can have different treatment.

Real estate owned

Identify every property, occupancy, mortgage, taxes/insurance/HOA and rental income. REO can create both qualifying income and liabilities.

Declarations

Ask exactly and neutrally. Bankruptcy, foreclosure, lawsuits, occupancy and other declarations can affect eligibility and documentation. Never coach an answer.

Questions to Ask — and Why

QUESTION TO ASK
WHY YOU ASK IT
WHAT THE ANSWER CHANGES
How are you paid: salary, hourly, overtime, bonus, commission or self-employed?
The income calculation and required history/documentation depend on pay type.
Determines which income analysis method and documents are needed.
Do you own any other property?
The application must capture real estate owned and related obligations.
May add mortgages/taxes/insurance and rental income or reserve requirements.
Will anyone else be obligated on this loan?
All borrowers and applicable liabilities/income must be captured correctly.
Changes application parties, credit and qualification.
Have you opened new credit recently?
Credit reports can lag new obligations.
May change DTI and require documentation.
Where will closing funds come from?
Application assets must support cash-to-close and reserves.
Changes gift/transfer/sourcing documentation.
Training standard: A student should be able to explain the concept in their own words, identify the borrower question that reveals it, and name the documentation or calculation that supports the answer.