Tips On How To Close Home Loan On Time
Closing on a home loan on time is everyone’s goal, especially if the mortgage loan is a home purchase loan. There are tips on how to close home loan on time and it can be done if all parties, from the home buyers side to home sellers side, all cooperate and work as a team. Teamwork is key on how to close home loan on time. The home buyer can do everything possible that is requested by their mortgage lender, however, there are issues that can delay a home closing if the sellers side does not cooperate. Certain things where we need the sellers cooperation is getting access to the subject property for home inspections, home appraisals, re-appraisals, making sure that title is ordered, glitches with title work, or in the event if there is something wrong with the property where it does not pass appraisal inspection and the home seller needs to correct certain items for an appraisal re-inspection.
Providing Complete Documents Is Key On How To Close Loan On Time
The mortgage processing stage is the most important stage. Mortgage processors are in charge of making sure that all documents provided by the mortgage loan applicant is complete and there are no missing pages on the documents provided. For example, mortgage lenders require 60 days of bank statements from all borrowers which includes blank pages. The reason being, each page of the bank statement states as follows: Page 1 Of 1, Page 2 Of 2, Page 3 Of 3, etc. Sometimes there are blank pages where it may state Page 5 Of 5 and that page 5 may be blank and many borrowers may just omit submitting the blank page. When a mortgage underwriter notices that the blank page is missing, this will put the whole file on hold and can be one of the many reasons why there are closing delays.
Proof Of Income During Mortgage Process
Mortgage lenders will need to verify your income besides reviewing two years tax returns, two years W-2s, two years 1099s, and most recent paycheck stubs. Mortgage borrowers will need to provide contact information of all employers they worked for in the past two years. Contact information should include name of company, address of company, position held, wage information, phone number of company, contact person and contact number of supervisor and human resources manager, start date, and termination date. Mortgage lenders will do a written verification of employment on all employers the borrower worked for in the past two years. If the mortgage loan borrower has non-traditional income such as social security income, disability income, pension income, dividend income from investments, child support income, alimony income, bonus income, part time income, overtime income, and investment property rental income, they need to provide documentation related to the source of income and all necessary paperwork so the mortgage underwriter can prove and verify the income so they can use it to calculate the mortgage loan borrower’s debt to income ratios.
Working On Homeowners Insurance Is Way On How To Close Home Loan On Time
One of the reasons why there are delays in home loan closings is because home buyers wait until the last minute to get homeowners insurance and those mortgage loan borrowers with higher debt to income ratios can run into problems if the homeowners insurance premium is higher than initially anticipated where the higher homeowners insurance premium can disqualify them for the home loan due to going over the maximum debt to income ratios permitted. The day you submit your mortgage application and mortgage documents, you should start shopping for homeowners insurance and try to get your homeowners insurance quote and declaration page as soon as possible instead of waiting to do this task at the last minute.
Providing Asset Documentation
Providing proper asset documentation without any missing items during the mortgage processing stage is how to close home loan on time. Mortgage lenders want to see that you have enough seasoned funds to close on your home loan. They need 60 days of bank statements and the bank statements need to have enough assets for your down payment. If you do not have enough funds in your bank statement, then you need to provide other asset accounts such as your 401k account, investment accounts, or other asset account where the down payment will come from. Bank statements will be carefully analyzed for irregular and large deposits. Any irregular or large deposits in your bank account will need to be sourced and mortgage underwriters will want to see where the money came from. Cash does not count. If you have large amounts of cash, the only way to be able to use that cash for funds to close is to deposit it to your bank account and let it season for 60 days.
Your credit report will be carefully reviewed and there cannot be any credit disputes on non-medical collection accounts with an aggregate unpaid collection balance of over $1,000. If the combination of all of your credit collection account is greater than $1,000, you need to have those credit disputes removed. The retraction of credit disputes will take time and this should be done prior to you applying for the mortgage loan. Unfortunately, a mortgage loan originator should catch this prior to issuing you a pre-approval letter but in the event if they do not, the credit dispute retraction needs to be done in order for the mortgage process to go forward. Retracting credit disputes is one of the biggest reasons why there is mortgage loan closing delays. Non-medical collection accounts with zero balances is exempt and you can have credit disputes with zero balance collection accounts. You cannot have credit disputes with charge off accounts. Charge off accounts do not count matter and does not count with FHA Loans so if you have charge off accounts, please do not dispute them. Medical collections are exempt also and credit disputes with medical collection accounts are allowed.