This article is about the closing mortgage on time and how to avoid closing delays.
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 the following topics:
- How loan officers should avoid closing delays.
- 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.
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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 the 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.
Home Closing Date Delayed Due To Mortgage Conditions
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 explanations
- Other requests stated on the conditional approval
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. 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.
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 direct 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.
Publish On: July 5, 2021 And Last updated On: November 4, 2022