Everyone wants to go through the mortgage process quickly. Not only fast but also having final loan approval very early. Now, this does heavily depend on the lender and their system, but the biggest delay is actually receiving required mortgage documents from all borrowers. During the purchase process, the buyer, seller, and real estate agents are pulling for an early clear to close. So, the following are tips to help buyers do their part for a successful closing.
This does assume our quick purchase process and other lenders with slower processes may have different outcomes.
Common Issues With Mortgage Documents
- Provide mortgage documents late in the process
- Missing tax return pages
- Incomplete application
- Erroneous information on the application
- Missing pages on bank statements
- Excessive cash deposits or cash earnest money
- Illegible or cut off documents
- Gradually provide requested documentation
- No explanation letter for credit or other issues
- Delays in signing disclosures
Best Way to Provide Mortgage Documents
- Provide all requested documents right away
- Provide all pages of requested tax returns
- Fully complete the loan application
- Review the application completely for errors. Better to fix errors up-front.
- Provide all pages of each bank, investment, or retirement statements
- Do not deposit large cash amounts into bank accounts or pay earnest money on a contract with cash
- Look at the documentation before providing to us
- Provide requested documentation when requested
- Explain major credit situations by what caused the issue, how it was remedied, and the outlook for the future
- Ask questions about the disclosures and make sure everything is understood prior to signing.
Think about it. If all documentation is not provided up-front, then our wonderful mortgage experts cannot review the whole scenario. Receiving surprising documentation with new information later in the process increases the chances of issues (delays) prior to closing. Conversely, if our mortgage team has everything, in the beginning, a very accurate loan approval is provided. Next, any remaining documentation is known and provided back to us. Thus, resulting in an early clear to close the mortgage.
Even if providing the documentation causes a loan denial, at least it is known in the beginning. There is nothing worse than going through the whole purchase process to find out just before closing that it doesn’t work.
Realtors should also encourage buyers to provide whatever documentation is requested early. The Realtor has a vested interest to make sure everything goes smoothly through closing. Therefore, it is imperative to discuss the importance of this area in the initial buyer meeting.