Loan Processor Interview Questions & Answers

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This is a highly esteemed privately held company, looking for to invest in human resources to expand Mortgage Loan to families seeking the American Dream of Homeownership.

I am absolutely familiar and spent many years training new loan officers on products and guidelines. I have done recent brushing up via the Internet and would like to gain more from your current employees.

It is a letter of credit or a contractual agreement between financial institute (Bank) and the party to which the letter is handed. The ILOC letter cannot be cancelled under any circumstance and, guarantees the payment to the party. It requires the bank to pay against the drafts meeting all the terms of ILOC. It is valid upto the stated period of time. For example, if a small business wanted to contract with an overseas supplier for a specified item they would come to an agreement on the terms of the sale like quality standards and pricing, and ask their respective banks to open a letter of credit for the transaction. The buyer's bank would forward the letter of credit to the seller's bank, where the payment terms would be finalized and the shipment would be made.

Title and appraisal documents should be reviewed for issues or inconsistencies upon receipt. Title liens and appraisal issues often take a considerable amount of time to resolve. The underwriting process is expedited when those things are identified and addressed early rather than left for discovery by the lender.

Commercial bank is owned by the group of individuals or by a member of Federal Reserve System. The commercial bank offer services to individuals, they are primarily concerned with receiving deposits and lending to business. Such bank earns money by imposing interest on the loan borrowed by the borrower. The money that is deposited by the customer will be used by the bank to give business loan, auto loan, mortgages and home repair loans.

Consumer bank is a new addition in the banking sector, such bank exist only in countries like U.S.A and Germany. This bank provides loans to their customer to buy T.V, Car, furniture etc. and give the option of easy payment through instalment.

The debt-to-income ratio is calculated by dividing a loan applicant's total debt payment by his gross income.

Line of credit is an agreement or arrangement between the bank and a borrower, to provide a certain amount of loans on borrower's demand. The borrower can withdraw the amount at any moment of time and pay the interest only on the amount withdrawn. For example, if you have $5000 line of credit, you can withdraw the full amount or any amount less than $5000 (say $2000) and only pay the interest for the amount withdrawn (in this case $2000).

Loan originator, learn procedures, guidelines and policies from my previous employers.

Chase, Huntington, PNC, and Private Clients.

‘APR' (Annual Percentage Rate) can be ‘Fixed' or ‘Variable' type. In ‘Fixed APR', the interest rate remains same throughout the term of the loan or mortgage, while in ‘Variable APR' the interest rate will change without notice, based on the other factors like ‘prime rate'.

Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees. Through payroll card, employer can load salary payments onto an employee's smart card, and employee can withdraw the salary even though he/she doesn't have an account in the bank.

Availability Float is a time difference between deposits made, and the funds are actually available in the account. It is time to process a physical cheque into your account.

For example, you have $20,000 already in your account and a cheque of another $10,000 dollar is deposited in your account but your account will show balance of $20,000 instead of $30,000 till your $10,000 dollar cheque is cleared this processing time is known as availability float.

Extremely confident in making crucial decisions. I have learned to trust my gut instinct. I would rather stop knowing that I erred on the side of caution.

‘Bill Discount' is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at less than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is $1000; the electricity bill company will sell the bill to the bank for 10% to 20% discount to the face value. Here, the bank will buy the electricity bill for $900 whose face value is $1000, now the bank will recover, full amount of bill from the customer i.e $1000. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.

There is not much difference between bank guarantee and letter of credit as they both take the liability of payment. A bank guarantee contains more risk for a bank than a letter of credit as it is protecting both parties the purchaser and seller.

Math, communication (written and verbal), ethics, organizational skills, setting and executing to achieve goals, proficiency in the application of the statistical and probability studies using the collected data and then concluding with a logical decision.

An experienced processor knows that although the condition sheet says that the lender wants one thing, they will actually accept another. Knowing how to ask the right person the right questions can save a lot of time and trouble.

In order for a loan to close in a timely fashion, file documentation must be available when needed. Find out the turn around time for all of the documents required for your file and request them far enough in advance.

Before opening a bank account, if it is a saving account, you have to check the interest rate on the deposit and whether the interest rate remains consistent for the period. If you have the checking account, then look for how many cheques are free to use. Some banks may charge you for using paper cheques or ordering new cheque books. Also, check for different debit card option that is provided on opening an account and online banking features.

Variety of tasks, feeling of satisfaction I get when I can assist consumers in their home needs.

Fixed = client pays off a fixed rate over a fixed time period regardless of changes in trends that may cause the loan payment to increase or decrease.

FHA= 1st time buyers with low or no downpayment and lower credit scores. It is secured by Mortgage insurance that is included in the payment of the loan.

VA= former military and is usually no money down. Interest Only=borrow has option to pay only the interest on this loan for a specified period of time.

Adjustable (ARM)= a client who wants a lower rate up front and is willing to have the payments balloon at a later date. Someone who.

Foreign draft is an alternative to foreign currency; it is generally used to send money to a foreign country. It can be purchased from the commercial banks, and they will charge according to their banks rules and norms. People opt for ‘foreign draft' for sending money as this method of sending money is cheaper and safer. It also enables receiver to access the funds quicker than a cheque or cash transfer.

My ideal company to work for would be one that is fast growing, fast paced and where there is room for learning and advancement.

Delays are usually encountered at closing. To avoid delays at closing always send the good faith estimate to the loan officer the day before closing to go over with the customers to make sure they are in agreement with the final numbers.