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Formal Approval Checklist & Advice

  • Updated
When the deal stage is changed to Formal Approval, BrokerEngine creates a task that tells the team to complete the Formal Approval Checklist. This checklist helps the broker team make sure key deal details (e.g. loan amount, payment term, interest rate, etc.) have been reviewed and verified before the client completes their property purchase. That task cannot be marked complete until all the items in the Formal Approval Checklist have been ticked off.

Formal Approval means the lender has unconditionally approved the deal, and the bank has no outstanding conditions to move forward with Settlement.

Contents

Prerequisites
What is Formal Approval?
When is a loan formally approved?
Stage Formal Approval steps
Reviewing the Formal Approval Checklist details
Marking the Formal Approval task complete
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Prerequisites

None.

 

What is Formal Approval?

The diagram below shows where Formal Approval sits within the loan lifecycle.

 

When is a loan formally approved?

A Formal Approval Letter email, usually in PDF format, is sent to the broker. The content of the letter varies from lender to lender, but at a minimum, it contains the following:

  1. client name(s)

  2. approved loan amount

  3. address of the security property

Stage Formal Approval steps

The primary purpose of Stage Formal Approval is to notify the client of the Formal Approval so they can inform the relevant parties.

Before you notify the client of the formal approval, you must first confirm that approval has been issued as you requested. That is, you must check these items:

  1. The loan amount is correct.

  2. The interest rate is correct (i.e. pricing has been applied if applicable).

  3. The lender's mortgage insurance (LMI) is accurate.

  4. The names are accurate.

  5. The required minimum building insurance has been secured.

  6. The delivery address for the mortgage documents.

  7. Other miscellaneous items (e.g. a fixed rate lock has been applied, the lender rebate has been approved, a First Home Owners grant was submitted).

The items to check vary depending on the 1-Click-Workflows and Type. For this reason, BrokerEngine has a separate Formal Approval Checklist for each deal.

Reviewing the Formal Approval Checklist details

The following steps explain how this checklist works and the steps involved. You can view lender contact details, including the broker's Broker Code, on the sidebar when completing a checklist.

Updating funding position in Checklist mode

Funding positions within BrokerEngine have a Checklist mode. This mode allows you to confirm the loan approval issued by the lender matches data in BrokerEngine.

To update the funding position in Checklist mode:

  1. Go to the left-hand menu and select Strategy > Funding Position.

  2. Set MODE to Formal.

  3. Open the Formal Approval Checklist on the right-hand side of the screen. If you need to call the lender to update the funding position in Checklist Mode, complete both the funding position and the checklist at the same time.


Checkboxes

The Formal Approval Checklist has hyperlinked options to guide you to the relevant fields. Once you select these options, the platform highlights numerous fields within the Funding Position.

 

As you scroll through the Funding Positions panel, you'll see some fields have multi-coloured checkboxes. Carefully verify the data in each checkbox. Check GREEN for correct information or RED for incorrect information.

Checklist items apply to every split in the Funding Position.

If any data are incorrect, update the Funding Position according to the lender's approval and note any changes against the deal, notifying the broker.

 

Marking a the Formal Approval task complete

The task can now be marked complete. This action triggers a workflow email to the broker or client-facing team with the following documents attached:

  1. Lender Formal Approval

  2. Broker Formal Approval Advice

These documents should be forwarded to the client, confirming the final details of the approval and the next steps.

  • Example Formal Approval Advice generated by BrokerEngine

Related articles

Introduction to Checklists
Client Facing Reports / Advices - Examples

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