There have been countless changes to the mortgage industry over the past decade. Many of these deal with the amount of necessary paperwork and the length of the process from start to finish. At times this can be very frustrating and cause you to wonder if you will ever get to closing. As difficult as this can be there are things you can do as a buyer to expedite this process. By taking a few simple steps on your end you can cut the mortgage process in half. If you are looking to close as quickly as possible here are a few steps you can take.
Get preapproved not just prequalified. The first step for any new buyer is to talk to a local lender or mortgage broker and get prequalified. This can be done over the phone with the lender asking you about income, employment, down payment and getting information to run a credit check. If the credit score and other items check out they will send your real estate agent over a prequalification letter. This is a good start but why not take it a step further? By supplying your lender with hard documents and a loan application they can submit these to a lender for approval. When you find a property you like they will plug in the new address and simply update any outdated items. This process alone can shave several weeks off of your loan underwriting time.
Have all items ready. Even though some loan underwriting policies have changed the basics of the application are still the same. You are going to need income documentation, bank statements, employment verification and a copy of your driver’s license. If you are self-employed you know you will need two years of tax returns and a business license. As soon as you start looking for a property you should have all of these items ready to go in a file or folder that is easily accessible. Most lenders will not start to look at your application until they have all of the necessary items. Get a jump on the process by having everything in place before you make an offer.
Be ready to act. Every large deposit or withdrawal needs to be verified and in some cases explained. You may not agree with what they lender is asking for but you will still need to provide it. Every day that you spend complaining and arguing about something is a day that is lost. As soon as your lender informs you that the bank needs something you should act. In most cases the items requested are a matter of you printing something out or finding something online. Your loan is not the only one the bank is working on. Once they sent out items that are needed it could be a few days before they get to your loan again. Something you submit on a Monday might not be looked at again until Friday. If it is not sufficient you could wait another few days before it is signed off on. As soon as the lender requests something take action and get everything they ask for the first time.
The average loan time is anywhere from 30-45 days from start to finish. By getting preapproved at the start and providing documents quickly you can easily cut this timeframe in half.