Steps Of The Home Mortgage Process From Pre-Approval To Closing
This article is about The Steps Of The Home Mortgage Process From Pre-Approval To Closing
Taking the Proper Steps Of The Home Mortgage Process is necessary to avoid stress and to close on time. The most important Steps Of The Home Mortgage Process is the qualification and pre-approval step. The number one reason for stress during the mortgage process and/or a last-minute mortgage denial is because the loan officer did not properly qualify the borrower. Over 75% of our borrowers at Gustan Cho Associates are folks who are either going through stress during the mortgage process and/or get a last-minute loan denial. There is no reason why borrowers should stress during the mortgage process. There is absolutely no reason why a mortgage loan should get a denial.
Again, if a loan officer does not properly qualify borrowers, stress during the mortgage process is common. There is no reason why borrowers, loan officers, realtors, processors, and third-party professionals should stress during the mortgage process. There is no reason why a mortgage should not close on time.
Today’s Mortgage Markets
Most mortgage companies are slammed with business. Refinances are at historical highs due to the low mortgage rates. Extending closing dates is very common. Extending closing dates is not necessary if Steps Of The Home Mortgage Process is properly followed during super busy times. Loan officers should take proper expectations with their borrowers. Do not tell your borrowers their loans will close in 3 weeks when it will be 45 days.
The mortgage business has not been this busy for years. Most mortgage companies cannot start processing a new file for at least 7 days after it has been submitted. Processing and underwriting times are 5 or more days at most mortgage companies. With the combination of super-low mortgage rates, low PMI rates, and the hot housing market, borrowers need to know that the Steps Of The Home Mortgage Process today is different than what has been in the past.
Following Steps Of The Home Mortgage Process Due To Hot Real Estate Market
Mortgage rates have been dropping since the beginning of the year. Mortgage rates are the lowest in three years. Most homeowners who closed on their home loans in 2020 are taking advantage of the low rates and are refinancing. Mortgage rates were at the highest levels since the 2008 Great Recession in 2020.
The massive refinance applications by refinancing borrowers are causing a shortage of mortgage processors and underwriters at most mortgage companies. Processing a file is more important than ever if borrowers want to close on time. The Wall Street Journal confirmed today that the “Average rate on a 30-year, fixed-rate mortgage was 3.25% last week, down from 4.94% in November 2018.”.
So what does all this mean to homebuyers and homeowners needing to refinance their mortgages?
How To Avoid Stress During Home Buying And Mortgage Process
We will be covering how to avoid stress during the Steps Of The Home Mortgage Process. The first step to avoid stress is to hire an experienced real estate agent with who homebuyers can get along. The realtor needs to know the area like their backyard. Many may have friends and relatives who may be real estate agents who only sold a few homes in the past few years as part-time agents. You may want to reconsider using a part-time agent who is a friend and/or relative. A home is most people’s largest investment in their lifetime. Take time in interviewing several real estate agents, check their online reviews, and make sure they know the community.
Documents Required To Process And Underwrite Mortgage Loan
The mortgage process is teamwork. To close a mortgage loan on time during these busy times, the full cooperation of the borrower is required. After the loan officer fully qualifies a borrower and issues the pre-approval letter, the borrower can shop for a home. Once the executed real estate purchase contract is submitted to the lender, the mortgage process starts. A mortgage processor will be assigned to the borrower.
The processor will request the mortgage documents required to process your loan. Borrowers need to take this step very seriously. All paperwork requested needs to be complete with no missing pages. Any items that are not complete or disorganized will delay the mortgage process. The mortgage processor will only do so much. Always make sure you get an acknowledgment after submitting documents to make sure it does not end up on a SPAM folder.
What Does Turnaround Time Mean?
Turnaround time means how long it takes the mortgage underwriter to review the conditions submitted and get an answer back. Once the mortgage processor has collected and reviewed all of the documents required to underwrite the loan, the processor will submit it to the underwriting department of the lender. A mortgage underwriter will be assigned to the file. The underwriting department of the mortgage company will set a turnaround time for an underwriter to review and issue a conditional loan approval.
Turnaround times can be anywhere between 24 hours to 72 hours. However, there are times where turnaround times can be as long as 14 days when the lender is super busy. It is very important that the mortgage processor turn in all of the mortgage documents required that are fully complete. If the processor makes a mistake and turns in an incomplete file, the file will be kicked back by the underwriter and the turnaround time starts from scratch. This is the reason why an experienced mortgage processor’s role is very important. Mortgage loans can close in 3 weeks or less during busy times. However, the loan officer, processor, borrower need to work as a team. Collecting documents that are complete is the most important part of closing the loan on time.