United States
Hong KongThe loan inquiry and application process
An enquiry becomes an application when six specific items are received. That moment starts the TRID clock and creates disclosure obligations, regardless of whether a form was signed.
Most origination questions are really questions about where you are in the process. This is the first station.
Enquiry against application
An enquiry is a conversation. An application is a defined regulatory state, reached when six items exist: name, income, social security number, property address, an estimate of value and the loan amount sought.
Nothing needs signing. No form needs completing. The six items alone do it.
An originator taking a casual call who gathers all six has received an application, and the Loan Estimate is due within three business days. Questions describe exactly this and ask what must now happen.
Pre-qualification and pre-approval
| Pre-qualification | Pre-approval | |
|---|---|---|
| Based on | Information the borrower states | Verified documentation |
| Credit pulled | Sometimes | Yes |
| Underwriting | None | Usually a review |
| Weight with a seller | Little | Considerable |
Neither is a commitment to lend. Both are commonly described as one by borrowers, and the exam checks that an originator knows the difference.
What happens next
Disclosures go out on the TRID timeline. Documentation is collected. The file goes to processing, then to underwriting, then back with conditions.
The originator's role through this is largely communication: setting expectations, chasing conditions and explaining what each document is for.
Intent to proceed
Until a consumer says they wish to continue, a creditor may not collect a fee beyond a reasonable charge for a credit report.
That rule protects a borrower who is shopping. Receiving a Loan Estimate is not agreeing to anything, and a creditor cannot treat it as such.
Common questions
When does an enquiry become an application?
When six items are received: name, income, social security number, property address, an estimate of value and the loan amount sought.
What is the difference between pre-qualification and pre-approval?
Pre-qualification rests on stated information. Pre-approval involves verified documentation and usually an underwriting review.
Is a pre-approval a commitment to lend?
No. Neither pre-qualification nor pre-approval commits the lender.
What is intent to proceed?
A consumer's indication that they wish to continue. Until it is given, a creditor may not collect fees beyond a reasonable credit report charge.
Does an application need a signed form?
No. The six items alone create an application.