Sloooooooow Down: Avoiding Mortgage Process Mistakes

June 1st, 2015

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Have you ever noticed that many of the mistakes you make in life are made in haste? I look back on all the things I’d like to do over, and most of them were because I was moving too quickly, thinking too fast, talking too fast and in far too big a hurry to get to the next 1,000 things on my to do list. If I would just slow down I bet I’d make a lot less mistakes in life. The same wisdom can be applied to mistakes made in the mortgage process.

If I’d just patiently read the instructions instead of thinking I am saving myself 2 minutes by skimming the instructions, I’d save an hour by knowing how to do the task at hand. I’d avoid wasting 20 minutes of someone else’s time having to ask them how to do something because I was too lazy or in too much of a hurry to read the instructions.

When I was a kid I’d build a model plane or car without looking at the instructions, desperate to see the finished product. Result? I’d have a bag of parts left!

As a young child I’d race through dinner just to get to dessert. Result? Stomach ache.

In college I’d skim a book for a class instead of reading the whole thing. Result? Not good.

As an adult sometimes I’ll ask an underwriter a mortgage guideline question because I know that they’ll get me the answer faster than my having to look it up on my own. Results? I’m ashamed because that is just lazy behavior.

This is applicable to all we do in life, and it is certainly applicable to the mortgage process. Mortgage borrowers can help themselves by taking away some of these valuable lessons:

  • Slow down and read all the loan disclosures, and read all the instructions on each phase of the loan.
  • Slow down and look at your documents as a mortgage underwriter would, and ask questions that you would ask if you were lending your own money to someone else.

When you print out bank statements from your financial institution’s website and there is no identifying information, how can a mortgage underwriter identify it as your document when your name and address are missing from it? Call the financial institution and ask them for a more formal account statement if their online statements are incomplete.

If your W2’s have some information cut off on one side, don’t hope that the underwriter does not notice, call your accountant or employer for a duplicate statement that is complete.

Don’t send JPEG files (camera pictures) or TIFF files of your supporting documentation, send only PDF files which are much more legible and easy to manage.

Don’t send hard to read or illegible documents. If something is too light and hard to read, take the time to secure a better copy. If a bank statement or tax return has 8 pages, send all 8 pages, not just the summary page.

If a pay stub has a deduction on it for a loan, explain and document the deduction. Don’t wait until the end of the process and hope no one asks you for something on it.

If you have large deposits on your bank statements, trust me, someone will want to know where the $30,000 deposit came from. Bring it up in advance to your loan officer and discuss what is needed to document and explain the large deposit.

Yes, all of this will result in more work and more time needed out of your schedule…on the front end. But when the job is done right, you will save yourself an enormous amount of time on the back end. When you are scrambling to explain and document a lot of things you were hoping to avoid a few days prior to a real estate closing, you’ll wish you had taken the extra few minutes to provide the necessary paperwork. Otherwise, imagine the loan process is a model airplane…and imagine your loan process having a bag of parts leftover at the end! Not a pretty sight.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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