Close Home Loan On Time

How To Close Home Loan on Time Without Stress and Delays

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers how to close home loan on time without stress during the mortgage process is every homebuyer and seller’s number one priority.  Closing a home loan on time without stress and delays is everyone’s goal, especially if it is a home purchase loan. A last-minute mortgage loan denial is any home buyer’s nightmare.  Mike Kortas, the Chief Executive Officer at NEXA Mortgage, explains his thoughts on how to close home loan on time without delays  or stress during the mortgage process as follows:

Delays in closing add countless stress for any borrower. There is no reason why a home loan should not close on time. There are tips on how to close a home loan on time. It can be done if all parties, from the home buyers’ side to the sellers’ side, cooperate and work as a team.

Teamwork is key to how to close a home loan on time. The home buyer can do everything possible that their lender requests. Some issues can delay a home closing if the seller’s side does not cooperate or loan officers do not properly qualify borrowers. In the following sections, we will discuss how to close home loan on time without stress or delays during the mortgage process.

Tips on How To Close Home Loon on Time

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Tips on how to close home loan on time is teamwork. Everyone in the home purchase team must share the main goal, as the utmost importance and priority is the home loan closing. The buyer’s and sellers’ sides need to cooperate versus working against each side.

The buyer and seller’s team must cooperate, taking the leadership role by ensuring third-party professionals such as the home inspector and appraiser gain access to the subject property for the inspection, appraisal, or re-inspection if necessary.

The title company needs to ensure the title has been ordered and there are no delays or glitches with title work. The appraiser may find something wrong with the property where it does not pass inspection. The home seller needs to correct certain items for an appraisal re-inspection so the home appraiser can sign off on it for the mortgage process to proceed.

Providing Complete Documents When Requested Is Key How To Close Loan on Time

The mortgage processing stage is the most important. Mortgage processors are in charge of ensuring that all documents the applicant provides are complete. Processors need to ensure no missing pages on the documents provided. For example, lenders require 60 days of bank statements from all borrowers, including blank pages.

The key how to close home loan on time is for support and operations team need to be sure, and fact-check that any documents submitted are complete and other are no missing pages including numbered blank pages.

The reason is that each bank statement’s page 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 omit to submit the blank page. When a mortgage underwriter notices that the blank page is missing, this will put the whole file on hold. Situations like these can be one of the many reasons why there are closing delays.

Proof of Income During the Mortgage Process

Lenders will need to verify the borrower’s income besides reviewing two years of tax returns, two years of W2s, two years of 1099s, and most recent paycheck stubs. Borrowers must provide the contact information of all employers they worked for in the past two years. Contact information should include the following:

  • name of the company
  • address of company
  • position held
  • wage information
  • phone number of the company
  • contact person and contact number of the supervisor and human resources manager
  • start date
  • termination date

Qualified Income: Verification of Employment

What is proof of income during the mortgage processLenders will do a written verification of employment on all employers the borrower worked for in the past two years. If a 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, or investment property rental income, supporting documents will be required for verification by mortgage underwriters. With the above types of income, borrowers need to provide documentation related to the source of income and all necessary paperwork. This is so the mortgage underwriter can prove and verify the income to use it to calculate the borrower’s debt-to-income ratios.

Working on Homeowners Insurance Is How To Close Home Loan on Time

How to close home loan on time without stress and delays in the mortgage process is not procrastinating when the team at the mortgage company requests documentation. Dustin Dumestre, a senior loan officer at Gustan Cho Associates, explains his thoughts on how to close home loan on time without delays as follows:

One common reason for delays in home loan closings is that homebuyers wait until the last minute to get homeowners insurance, divorce decree, bankruptcy paperwork, or income and asset documentation.

Borrowers with higher debt-to-income ratios can face problems if the homeowner’s insurance premium is higher than initially anticipated. This is 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 borrowers submit their mortgage applications and documents, they should start shopping for homeowners insurance. Borrowers try to get homeowners’ insurance quotes and declaration pages as soon as possible instead of waiting to do this task at the last minute.

How To Close Home Loan on Time By Providing Asset Documentation Timely

Providing proper asset documentation without missing items during the mortgage processing stage is how to close the home loan on time. Lenders want home buyers to have enough seasoned funds to close their home loans. They need 60 days of bank statements. Bank statements need to have enough assets for the down payment.

Buyers without enough funds in bank statements must provide alternative asset account documentation or gift funds from a family member. Alternative assets that used for the down payment and closing costs, include 401k accounts, investment accounts, or other asset accounts 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 must be sourced, and mortgage underwriters will want to see where the money came from. Cash does not count. For borrowers with large amounts of cash, the only way to use that cash for funds to close is to deposit it to their bank account and let it season for 60 days.

How To Close Home Loan on Time: Check Credit Profile For Accuracy and Errors

How To Close Home Loan On Time And Avoid Mortgage DenialThe consumer credit report will be carefully reviewed. There cannot be any credit disputes on non-medical collection accounts with an aggregate unpaid collection balance of over $1,000 on FHA loans. If the combination of all credit collection accounts is greater than $1,000, borrowers need to have those credit disputes removed.

The retraction of credit disputes will take time. This should be done before applying for a mortgage loan. Unfortunately, a mortgage loan originator should catch this before issuing home buyers a pre-approval letter. But if they do not, the credit dispute retraction must be done for the mortgage process to proceed.

Retracting credit disputes is one of the biggest reasons why there are mortgage loan closing delays Non-medical collection accounts with zero balances are exempt. Borrowers can have credit disputes with zero balance collection accounts. Cannot have credit disputes with charged-off accounts. Charge-off accounts do not count matter. Charge-offs do not count with FHA loans, so if borrowers have charged-off accounts, please do not dispute them. Medical collections are also exempt, and credit disputes with medical collection accounts are allowed.

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