This guide covers closing mortgage on time without stress during the mortgage process. All mortgage loans should not be delayed and close on time. However, this is often not the case. In this article, we will cover how mortgage loans should close on time. We will cover how loan officers should avoid closing delays.
Following these steps and maintaining proactive communication with your lender, real estate agent, and other parties involved can increase the chances of closing your mortgage on time and without delays.
Remember that the specific requirements and timelines may vary depending on your location and the type of mortgage you’re obtaining. Mortgage processors should realized the importance of preparing a mortgage file. How the mortgage processor should never submit a file to the underwriter without scrubbing the file. Credit disputes can cause delays. An unqualified pre-approval can cause delays in the overall mortgage process. In the following paragraphs, we will cover closing mortgage on time without delays.
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Delays in Meeting Mortgage Delays
One of the biggest problems in the mortgage industry is meeting the initial closing date and closing mortgage on time. There is no reason why closing mortgage on time cannot happen on all home loan closings. When homebuyers enter into a real estate purchase contract there is a tentative closing date. Tentative closing dates are normally 30 to 45 days after acceptance of the contract from the seller. Very rarely does it go beyond 45 days unless it is new construction. But sometimes both buyers and sellers need to extend the closing date.
Many real estate agents admit that more times than not, closing dates get delayed or postponed due to the home buyer’s mortgage lenders.
There is absolutely no reason why a closing date cannot be met and the deal should closing mortgage on time. There are conditions that need to be provided to the mortgage underwriter prior to a clear to close But those conditions should not wait until the last minute. 30 days to close from the signed real estate purchase contract should be more than enough time. All of our pre-approvals at Gustan Cho Associates are full-credit mortgage loan approvals that are fully underwritten and signed off by our mortgage underwriters. This is the reason why we close all of our loans on time. Closing mortgage on time is often not the case with many other lenders.
Reasons Why Cannot Do Closing Mortgage on Time
There are legitimate reasons why a real estate closing date cannot be met. One of the most common reasons why an initial closing date cannot be met is when an appraisal comes in lower than the purchase price. If an appraisal rebuttal is requested, then the seller’s real estate agent needs to provide comparable sales rebutting the original appraisal. The appraisal rebuttal request needs to get submitted to the Appraisal Management Company. It might be a 3 to 5 day turnaround time for this process to be completed. The buyers and sellers also may need to negotiate a new purchase price. An addendum to the initial purchase contract needs to be provided.
The Mortgage Process Closing Mortgage on Time
Closing mortgage on time without delays requires careful planning, communication, and adherence to the mortgage process. Here are some steps to help ensure a smooth and timely mortgage closing. Begin by getting pre-approved for a mortgage. This step ensures that you’re eligible for a loan. Choose a reputable lender: Select a reliable mortgage lender with a track record of on-time closings and good communication. Research and compare lenders to find the right fit for your needs.
Complete the Loan Application
Promptly submit all required documents and information to your lender. This includes income verification, credit reports, bank statements, and other financial documentation. Maintain open lines of communication with your loan officer. Ask requested promptly.
Avoid making significant financial changes during the mortgage process, such as changing jobs, taking on new debt, or moving funds between accounts, as this can complicate your application.
Obtain a pre-closing checklist from your lender that outlines all the required documentation and steps leading up to the closing date. Follow this checklist diligently. Address any necessary repairs or negotiations with the seller. Review the Closing Disclosure (CD). The lender must provide a CD at least three business days before closing. Review it carefully to understand all the terms, costs, and fees associated with your mortgage. Ensure you have the funds for closing costs and down payment in your bank account.
Home Closing Date Delayed Due To Mortgage Conditions
Stay in Contact with Your Lender: Continue communicating with your lender throughout the closing process, addressing any last-minute questions or concerns. Be Flexible: Sometimes unexpected delays can occur due to various factors. Being flexible and patient can help navigate these situations. Another reason why a closing date cannot be met is turning in the conditions to the mortgage underwriter. Conditions are things such as the following:
- W-2s, tax returns
- Bank statements
- VOR: the Verification of deposit
- The VOE which Verification of employment
- Rental Verification: Verification of rent
- Letters of explanation
- Other requests stated on the conditional approval
Coordinate with Your Real Estate Agent to coordinate inspections, negotiations, and other activities leading up to closing. Ensure the property appraises at or above the agreed-upon purchase price. Discuss options with your lender and the seller if the appraisal falls short.
Conditional Mortgage Loan Approval
Once the mortgage application has been processed and submitted to underwriting and assigned to an underwriter, the underwriter will go over every aspect of the file. If the file has missing information, the file is then kicked back to processing and this will cause a delay in the mortgage approval process. Attend the Final Walk-Through: Perform a final walk-through that matches your expectations before closing.
It is extremely important that a mortgage loan processor submits the complete mortgage package along with the required documents.
If the processor skips say a tax return or bank statement, the underwriter will reject the file and the file is now at the end of the underwriter’s roster and needs to start over. The mortgage application package needs to be submitted after the whole package is fully complete. Never submit it piecemeal because it will get kicked back. This might delay the underwriter looking at the file but overall, it will be a speedier mortgage approval process.
Getting a Clear To Close
Once the underwriter reviews the borrower’s file and determines that it meets the mortgage lender’s underwriting and mortgage approval guidelines, the underwriter will issue a conditional mortgage loan approval. Once the conditions have been met, a clear to close will be issued. A clear to close is that the mortgage lender is ready to prepare closing docs and fund the mortgage loan. Many times closing dates get postponed because the mortgage conditions are not turned in until the last minute.
Those who want to meet the closing date should gather up all the conditions within 24 hours from the issuance of the conditional approval and submit it back to the underwriter.
Be Present at Closing: Attend the meeting with all required documents, identification, and funds. Review and sign all necessary paperwork carefully. Borrowers need to understand that once all conditions have been met, the second round of conditions can be requested as well. Home Buyers or homeowners who need to qualify for a mortgage with a lender with no overlays can contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or mail us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.
