We all want things to go faster. We wanted communication to go faster, so a phone was invented, then email and the internet. We wanted cooking to go faster, and someone invented the microwave. We wanted travel to go faster, and the car was invented, and then the plane. What is next?! In all my years in the mortgage business, it seems we still can’t make the mortgage transaction go a lot faster. Why can’t we get a mortgage done in a few days, or a week? Seems we should be able to do so in today’s era of technology! Putting that aside…I can tell you how to make a loan go a little bit faster. Here is how:
1. Do your loan application immediately. When you ratify a contract on a home, do the loan application the same day. I have clients who wait 3 days, and then finally get around to doing the loan application, and then wonder why their process took so long. As a matter of fact, pick a lender and do your loan application (this is a different form and process than a pre-approval) before you even buy, to get a jump start on things.
2. Offer to pay extra for your appraisal. If the standard fee is $450, offer to make it $550. An appraiser will accept a rush order, and actually deliver on the turn time needed, if there is a larger fee involved. For $100, it is more than worth it.
3. Review, sign and return your loan disclosures on day 1, because its a very important rule that the lender not order your appraisal until you have been disclosed to, as evidenced by your signatures on your loan disclosures.
4. Send in all of your supporting documents ASAP, on day 1 or 2. Sending in your pay stubs, W2’s, tax returns and bank statements early will help your lender let you know if something is incomplete, or if there is a question that one of your documents triggers that requires even more documentation.
5. Whenever your lender asks for an additional item, get it back to them immediately, same day or next day. While paperwork is not fun for anyone, it is critical in how the lender makes their underwriting decision, and is always needed right away.
6. Have all of your tax returns filed (you’d be surprised at how many people apply for a loan although they have not filed tax returns in the last year or two), try not to move assets around, do not borrow any money, and hopefully you won’t have any job changes to make. If you can keep things static for a few months prior to your loan application, it will help things go more quickly.
7. Working with a direct lender, and making sure your lender has control over the process from start to finish, helps with the speed of the transaction. A mortgage broker has to send the file to the bank for underwriting, and preparation of closing documents, and that can drastically slow down the process.
8. Last, be available. I am also surprised at the number of people that buy or refinance a home, and then once the process is started announce they have a two week vacation they are leaving for, and won’t be around to review disclosures, send in supporting documents, or help to coordinate an appraisal.
Follow these steps as much as you can, and your loan will go as quickly as it possibly can.