Introduction
In 1989, Equifax was the first credit bureau to use the FICO score. By 1991, all three big credit bureaus (Equifax, TransUnion, and Experian)started using it, too. By 1993, lenders made use of specialised FICO scores in the auto, credit card, time payment plan, and personal finance businesses.
Credit scores have influenced a person's ability to get different loans for over 30 years. FICO scores can vary anywherefrom 300 to 850. Higher scores indicate that the individual is better financially. That's why people are interested in keeping good credit scores.The good news is that Americans have been doing well with their credit scores for a long time.
Since October 2013, the average FICO Score in the US has been rising. It reached a high point of 716 from 690 in April 2021.
Although FICO is good for someone with a stable job, but it isn’t useful for the real-time income analysis of a sole proprietor who hasn't been employed on a monthly fixed salary because it lacks automation.So, it is a tedious task for a loan officer to run through several of a self-employed person's tax and bank documents on a manual basis.
This practice requires a large workforce and human resources. That's why it's better to use an automation tool to calculate borrowers' takings who are involved in multiple activities.
The income verification tool we are working with is the Vaultedge Income analyzer (VIA), compared with other tools like cash flow underwriting or AIQ Income analyzer.
Here we go to analyze these tools.
Cashflow underwriting puts alternative data like income or bank statements into practice to better understand a mortgagor's cash flow analysis and assess their financial security. Although it's a standard method of determining creditworthiness, it has several areas of improvement that can impact its effectiveness, such as dependency on historical financial data to forecast future cashflows, responsiveness to economic conditions, non-traditional income stream evaluation inability, and negligence of non-cash expenses.
In the same way, although AIQ Income Analyzer is a better income calculation automation software, it's a good alternative for lenders who are already dealing with AIQ’s Encompass. However, if you are using a third-party or custom-built LOS, integrating it with AIQ is pricey and takes a lot of tech work. The shortcomings of such type can result in strict assessments, which may not accurately depict the debtor's financial stability.
VIA a Game Changer for Mortgage Lenders
Income analysis is now significantly easier through VIA as it automates many tedious manual tasks loan officers perform, such as classifying, indexing, and extracting data from documents like pay stubs, tax returns, and bank statements. It can automatically calculate income for both W-2 and self-employed borrowers with just a click of a button.
Vaultedge provides software to analyze income.It is backed by Artificial Intelligence, machine learning, and optical character recognition (OCR) systems. This technology helps to scan the document and saves mortgage lenders time by automating document processing.
Can you imagine how long it would take to pour through all those documents and records to input each number or figure? This tool does it instantly.
It analyzes the income information through AI software backed by a human to calculate a borrower's qualified income. This streamlines the process, making it 80% more efficient and minimising human error. Not only that, but pulling straight from the source docs helps ensure there are no silly human errors that could happen when entering data by hand.That's got to give underwriters more confidence in the analysis. If anything has gone astray from the file, its dashboard makes it simple to pick out right away, so you don't have to worry and waste time reviewing a scrappy application.
It also saves about 2-4 hours of loan officers per application by automation. Moreover, to increase time savings, VIA enhances productivity and loan acceptance rates by 33% by systemising income verification.
Markedly, it generates reports that harmoniously upload for approval into Fannie Mae and Freddie Mac underwriting systems. Its analysis is also cross-checked by human underwriters, ensuring its correctness and giving customers a better experience.
By automatising income authentication, while maintaining acquiescence and quality control, the Vaultedge Income Analyzer is obviously the appropriate tool for banks and mortgage lenders to use technology to find out more quickly and accurately whether the borrower is financially sound or not.
Conclusion
The benefits of clarity, orderliness, and compliance of the Vaultedge Income analyzer help protect your brand and lower risk. In the meantime, the better experience it gives creditors could help bring in more customers. Overall, this cutting-edge software simplifies a part of the lending process that wasn't very efficient in the past. This lets your team do more with less.
It has been suggested that you schedule a personalized demo if you want to learn more about how the Vaultedge Income Analyzer could help your business grow faster, be more efficient, and gain a competitive edge. During the test, the team experts can make use of your actual loan files and underwriting process to show you what the tool can do.
Keep your competitors from getting ahead of you; request a test today to see how the Vaultedge Income Analyzer can change the way you do mortgages and set your business up for long-term success.
No wonder many mortgage companies have decided to start using the Vaultedge Income Analyzer in their businesses because of its trustworthiness!