Avoiding Delays In Home Loan Process & Closing On Time


Avoiding Delays In Home Loan Process & Closing On Time

This BLOG On Avoiding Delays In Home Loan Process & Closing On Time Was Written By Gustan Cho NMLS 873293

Over 75% of our borrowers at The Gustan Cho Team are folks who either gotten a last minute loan denial by another lender or are stressing during the mortgage process with their current lender. Avoiding Delays In Home Loan Process is not difficult. It all starts with a little extra little work during the qualification process by gathering all borrower’s docs and making sure it is complete with no missing pages.

  • The main reason for this is due to the fact that borrowers were not properly qualified during the pre-qualification and pre-approval process.
  • There is no reason why borrowers who are properly qualified and pre-approved should not close their home loan.
  • Not just close on their mortgage, but close their home loan on time. 
  • Avoiding Delays In Home Loan Process is very common sense and it all begins with making sure that proper documents required to process mortgage is complete.
  • There are so many instances where a loan officer turns in a bunch of documents without reviewing it and the processor skims the file over and turns it in for underwriting.
  • The underwriter will not complete underwriting files that are incomplete with missing documents or docs that are not legible.
  • It will get kicked back to processing and the processor will kick it back to the loan officer.
  • Having complete legible documents is the key in Avoiding Delays In Home Loan Process.

Avoiding Delays In Home Loan Process Starts With Submitting Complete & Legible Docs

Below Is A List Of Documents Required To Process Mortgage

Loan Officers need to thoroughly review the docs below prior to issuing pre-approval. Avoiding Delays In Home Loan Process starts by getting the following documents in order, organized, and in PDF Format with no missing pages.

  • Paycheck Stubs:  Most recent pay stubs covering a full 30 days.
    1. If borrowers are paid weekly, then need to provide four weeks of paycheck stubs.
    2. If applicants are paid twice a month or bi-weekly, then provide two or more paycheck stubs so it covers a full 30 days of pay period.
    3. So there are no misunderstandings and to make it easier for the loan officer, please make it a point that the loan officer fully understands on how borrowers get paid.
    4. For example, if mortgage applicants receive bonus or commission income, advise the loan officer on the frequency and how long.
    5.  Borrowers who are school teachers, advise the loan officer on the payment schedule over a 12 month period.
    6. Some teachers may get paid over a 10 month period, 11 month period, or 12 month period.
    7. Qualifying income is one of the most important steps in the mortgage process .
  • Bank Statements: Borrowers need to provide two months of most recent bank statement for deposit accounts (checking/savings).
    • Borrowers need to provide all pages of the bank statements even if they are blank.
    • If it is a transaction history (bank statement printouts) it must be from the bank teller.
    • Bank account holders needs to tell the bank teller that the lender needs 60 days bank statement printouts.
    • Bank tellers will know exactly what to provide for those that tell them that they are applying for a mortgage.
    • The bank statement printouts must be signed, dated and stamped by the bank teller and must include the account holder’s name and account number.
    • Most mortgage lenders prefer the actual bank statements by the bank, however, bank statement printouts that has been signed, stamped, and dated by the bank teller is acceptable.
    • Transaction reports (bank statement printouts) are common when there are gaps in dates or sourcing funds from a gift.
    • When a borrower get Gift Funds for down payment by a family member, the donor needs to provide 30 days of their bank statement where the gift funds were seasoned and show that the exact amount of gift funds withdrawn from their bank account.
    • The recipient of the gift funds ( mortgage borrower ) needs to provide the bank statement printout showing the deposit of the gift funds, and the deposit slip of the gift funds.
  • Tax Returns & W-2s: All mortgage borrowers who are salaried employees and/or hourly employees need to provide two years of tax returns and two years of W2s.
  • Self Employed Borrowers Need YTD Profit/Loss, Current Balance Sheet, Personal & Business Tax Returns, & K- For all self employed borrowers, we would need the following:
    • Borrowers who are self-employed need to provide two years of tax returns, year to date profit/loss statement, and current balance sheet for self -employed borrowers.
    • Page 2 of tax returns must be signed by the borrower and tax preparer/accountant if the tax returns were prepared by an accountant.
    • All pages of the tax returns even if they are blank pages are required.  
    • Self- employed borrowers need to provide both personal tax returns as well as business returns and K1’s.
  • Homeowners Insurance Contact Information : Home Buyers do not have to pay homeowners insurance but need the declaration page:
    • Borrowers needs to provide the copy of homeowner’s insurance or the name, address, and phone number of the insurance agent that they will be using.
  • Divorce Decree, Child Support Documents & Birth Certificate Of Children, Alimony Paperwork If Applicable: For Borrowers who had prior divorce:
    • Borrowers who went through a prior divorce, a copy of your divorce decree, alimony agreement, and child support documentation needs to be provided.
    • If borrower is receiving and/or paying child support, please provide a copy of the child’s birth certificate to ensure that there is a 3 year continuance.
    • Child support income, alimony income, and other income can be used as qualified income if and only if the child support income will continue for the next three years.
  • Asset Account Documents:  
    • Borrowers need to provide 401K Paperwork, Profit Sharing and/or Pension Fund statements.
    • All pages are required including blank pages:
    • If using these accounts to show proof of funds for down payment and/or closing costs, please provide terms and conditions for the asset accounts as well as the terms for eligibility to withdraw the funds from these accounts.
  • Liquid Asset Accounts:
    • Liquid asset accounts such as Securities Investments:
    • Stocks, Bonds, Mutual Funds and/or Portfolio Investment Accounts, please provide complete statements as well as all pages including blank pages.
  • Identification:
    • Borrowers need to provide legible copies of front and back of Driver’s License, Social Security card or other forms of identification.
    • Borrowers in the United States on a work Visa please provide a copy of the Visa, SS card and passport.
  • Real Estate Purchase Contract :
    • Copies of fully executed purchase contract with all addendum needed.
    • If purchase is a Condominium or Town Home, please furnish the association name, phone number, and contact person of the Condo Homeowners Association.
    • Real Estate Purchase Contracts must be signed by all parties.
    • If an earnest money deposit has been given, provide a copy of the cancelled check and the bank statement showing the withdrawal coming out of the account.
  • Social Security Awards Letter/ Pension Paperwork:
    • Borrowers who are on Social Security Income, please provide copy of Social Security award letter if applicable.
    • If your receiving Social Security for children, please provide dates of birth and copy of birth certificates to show 3-year continuance.
  • Letters Of Explanations :
    • Borrowers will be asked to write letters of explanations throughout the mortgage process on items that the underwriter may need clarification on.  
    • Need to provide letters of explanation for credit inquiries in the past 120 days, address variances, collection accounts, judgments, and other out of the ordinary issues that may arise during mortgage process.
    • Loan officer will go over the request on letter of explanations.
    • These letter of explanations do not have to be long and usually one or two sentences will sufficient.
    • Example, borrowers with multiple credit inquiries on your credit report from mortgage companies, response on letter of explanation will be ” Shopping For Mortgage”.
    • A letter for explanation for outstanding collection accounts can be ” Was out of work and fell behind due to no income and account went into collection”.
    • Letters of explanations does not have to be long and your loan officer will often write the letter of explanation for you.

Please contact assigned loan officer or call or email Gustan Cho at USA Mortgage at 262-878-1965 or text Gustan for fast response at 262-716-8151. All secured documents should be sent to:

Secured Email: gcho@usa-mortgage.com

Apply Now: www.gustancho.com/apply-now

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