The Biggest Delay In Processing A Mortgage Today

Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

I had a conversation with one of my favorite ActiveRain members Lynn B. Friedman a couple of weeks ago, and Lynn suggested I write a blog about what is The Biggest Delay In Processing A Mortgage Today.  I have written blogs about this in the past, but this is a topic which needs to be written about often.  No one likes delays in anything, especially when it comes to a stressful process like getting approval for a mortgage. 

The biggest delay is one which everyone involved in the purchase or the selling of a home can assist in.  The biggest delay today in processing a mortgage is collecting all of the documentation required before the loan can be approved.  So once a Borrower starts the Homebuying Process they should begin to put together all the documents they will be required when they go to apply for a Mortgage.  When I Pre-Approve my Borrowers, and they plan on purchasing a home soon, I go over the list of documents they will be required to produce when they apply for the mortgage. 

Likewise I feel it would also be a good practice for Realtors/Agents to make their Buyer aware of the basic documents required when they meet with the Buyer as well.  Starting the process as soon as possible to put together all the documents required, before the Buyer/Borrower meets with a Loan Originator to apply for the mortgage  will avoid delays later, especially if the Borrower does not presently have them in their possession.  This is particularly important with the younger generations who do everything online, and normally do not have hard copies of many of the documents I will list below.

Not all Loan Programs require the same documents, but there is a group of basic documents required for every Loan Program:

  • One month of paystubs, or if retired or disable
  • If Retired Pension Award Letter & proof of receipt
  • If Disabled Permanent Disability Award Letter & proof of receipt
  • Social Security Yearly Award Letter
  • W2's or 1099's for the past two years
  • Two years of tax returns if self-employed
  • 1-3 months of Bank statements depending on the Loan Program (all pages), for ALL accounts which will be use to provide the down payment and closing costs.

As simple as it may seem to compile these documents, there are many times when the Borrower does not have them as I previously mentioned.  This is the case for many young Borrowers and can be a big issue with others as well.  For example, there are Borrowers who do not keep their paystubs or bank statements.  There are even Borrowers who do not keep a copy of their W2's or Tax Returns and it will take them time to obtain new copies.  When the Borrower does not have these initial documents, delays are created which could have been avoided if they had started to look for them early in the Homebuying Process.

There are other documents that are needed depending on the Loan Program such as:

  • Veterans Certificate of Eligibility & DD 214 (VA Loans)
  • Divorce Decree
  • Proof of receipt of Alimony Payments
  • Proof of receipt of Child Support Payments
  • Gift Money:
    • Copy of Gift Check
    • Proof of withdrawal from the Donor
    • Proof of deposit from the Borrower
  • 401K/IRA/Retirement Accounts
    • Quarterly Statement
    • Letter from Plan Administrator with proof of available funds for withdrawal
    • Terms of withdrawal
    • Copy of check for withdrawn funds when received
    • Proof of deposit.
  • Bankruptcy documentation

There may still be other documents which sometimes are also needed, but these are the ones most common depending on the loan program the Borrower is applying for.


  • Sourcing Deposits:  One other BIG thing Buyers/Borrowers can do to speed up the Mortgage Process is to go through their Bank Statements they will be providing to the Lender and have an explanation written out for all bank deposits if the source of the deposit cannot be identified on the Bank Statement.  These days Lenders need to document and source ALL deposits, so having these explanations ready would substantially reduce the time required to approve a mortgage.
  • Limit Transfers:  The other BIG thing Buyers/Borrowers can also do to avoid delays is to avoid making transfers between bank accounts they will not be using for the down payment and closing costs.  If a transfer is made from one account into one of the accounts provided for the down payment and closing costs, the bank statements for that account will need to be provided as well, especially if it is a deposit.  This can not only create delays, it could put the loan in jeopardy if there were bounced checks it the other account.  The more documentation provided, the more the likelyhood something may be found which could put the loan in jeopardy.  Keep It Simple is a good thing to remember!

If the Buyer/Borrower is made aware of these things by all the Real Estate Professionals involved in the purchase of the home early in the Homebuying Process, most of the delays and stress a Buyer/Borrower goes through during the Mortgage Process could be eliminated.  Just a little time spent in preparation and planning, can sometimes save many days, and weeks of delays once the Buyer/Borrower has found the home they want to purchase.  The Biggest Delay In Processing A Mortgage Today does not have to happen if Realtors and Loan Originators are proactive in getting Buyers/Borrowers started on putting document together as early as possible in the home purchase process.




 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & #FL and can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or


Re-Blogged 2 times:

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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi George

This is such important information for buyers. I find that many are surprised at how much documentation is required and how long it can take to assemble it all, especially if your financial situation is complex. Better to know in advance so there are no surprises.

And of course the paper trails and explanations for big deposits, withdrawals, and transfers are important, too.


Feb 15, 2017 03:31 PM #1
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi George - That is certainly the cause of most of the delays we see, and we always try to make our buyers aware of what is required and what is at stake. Thanks for the document list - it's very helpful.

Feb 15, 2017 03:40 PM #2
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     The list has grown so much longer than when I started in this business, George.  That's why I get the Buyer/Borrower to start rounding up documents immediately.  Thanks for the list!

Feb 15, 2017 04:25 PM #3
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening George Souto ,

I'm so glad that Fred Griffin re-blogged your post..I missed it. Excellent advice..the list has gotten long and I'm always telling my buyers..first priority is to get EVERYTHING to your lender..all documents..time is of the essence!

Feb 15, 2017 04:54 PM #4
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

This is important information for buyers and it is all the same data that we collect when doing a short sale

Feb 15, 2017 05:47 PM #5
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi George - It is best to get the message out early since you know some people will have some work to do to gather this.

Feb 15, 2017 06:36 PM #6
Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

Excellent blog George, this kind of information really helps us. I am glad we have you around besides you being such a nice guy.

Feb 15, 2017 07:12 PM #7
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives

George Souto - I can always count on you for providing us with valuable information. Thank you! 

You are living a purposeful life, helping so many people. May you be blessed for all that you do. I wonder if you even know how many people have homes today because of you?

Feb 15, 2017 07:43 PM #8
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Would that every loan officer would supply a list to begin their work with a new buyer....but not every loan officer is George Souto  !

Feb 16, 2017 04:22 AM #9
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning George.  I've certainly seen this with some of the mortgages I've been dealing with in recent years.

Feb 16, 2017 05:49 AM #10
Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

George Souto 
Great answer to my curiosity! I really appreciate how thorough you are when you teach all of us!! All the best - Lynn

Feb 16, 2017 09:33 AM #11
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

The process is what it is ... and that means lots of documentation is required from Buyers (and Sellers).  Most don't like that fact ... but the need still remains.  The faster and more thoroughly clients comply, the faster and more easily their processing will go.  Your list helps clients accomplish that, George Souto  ... and gets them to the finish line in great shape ...


Feb 20, 2017 12:04 PM #12
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Before I read this , I thought it might be the Appraiser . But you are right some buyers are not at all organized and struggle with detail !

Feb 25, 2017 06:14 PM #13
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Great advice and lists George. I agree it is amazing how many people do not keep financial paperwork handy or at all.  

Mar 17, 2017 11:25 AM #14
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