HOW TO CLOSE ON YOUR MORTGAGE LOAN ON TIME

HOW TO CLOSE ON YOUR MORTGAGE LOAN ON TIME

How to close on your mortgage loan on time and what things the borrower controls are important to understand. Once you find a home you want to buy or if  you are refinancing a home loan there can be several moving parts.

From a loan originator point of view I love when every facet of a mortgage loan goes smoothly. I do everything in my power to set reasonable expectations and educate borrowers about the process and possible pitfalls. Not everything is in my control, however, and here are a couple of pointers.

If you are buying a home you have an expected closing date that meets both your and seller's agreed schedule. The process of getting a loan is pretty straightforward for most folks. A lender will need a few documents (today many documents can be electronically acquired), often an appraisal is needed and title work is ordered.

If a borrower does not provide the paperwork necessary for processing/underwriting in a timely manner days or weeks can be wasted. Having a clear understanding of exactly what you need before you write an offer is imperative. Providing the paperwork immediately upon having an accepted offer is a must.

Providing the necessary paperwork is 100% something that is controlled by the borower. 

Currently underwriting times are fairly quick, only a day or so. Taking weeks to get the the paperwork may not be the end of the world but it leaves little time if additional information is needed after the initial underwrite.

If a home buyer is utilizing the services of a whole house inspector then do it ASAP!

Most folks utilize a whole house inspector, some like to get that inspection under their belt before paying for an appraisal.  Once an appraisal is ordered the fee is not refundable; if one decides to not purchase the property after a whole house inspection they will not get the appraisal fee back. 

An appraisal can take from ten days to two weeks to be delivered. If a home buyer wants to wait for the whole house inspection to be completed before ordering an appraisal it is mandatory the whole house inspection be done immediately. If one takes a week for a whole house inspection and two weeks for an appraisal to be delivered now three weeks have expired.

Sometimes when an appraisal is completed there are repairs that need to be made. The usual process is that the appraiser will go back and reinspect the property after the repairs are made.  In these cases one needs to allow time for the repairs to be made AND another appraiser inspection with reporting.

  At this point the timing will feel like it is out of the control of the borrower since they cannot set the schedule for the appraiser, nor can they determine how long the seller may take to make requested repairs. Getting the appraisal ordered at the earliest possible moment is something the borrower can control. 

In summary there are two things in the control of the borrower when buying a home (1) getting your required documents in right away so underwriting can take place, and (2) if  you are doing a home inspection before ordering the appraisal get it done! These two things can make a huge difference in closing on time. They are both under the control of the home buyer or home owner in the case of a refinance.