Fast, fast mort­gage clos­ing

Home - Santa Fe Real Estate Guide - - MORTGAGEMATTERS SPOUSESSELLINGHOUSES - JIM GAY

Clos­ing your mort­gage loan quickly makes ev­ery­one con­cerned Happy, Happy, Happy. Your Realtor will be beam­ing be­cause you are. Your mort­gage bro­ker can add your file to the “Win­ning” drawer with a warm sense of ac­com­plish­ment. The ti­tle-com­pany closer can move on to the next suc­cess­ful trans­ac­tion with a smile. The sellers, who wanted to close yes­ter­day, have re­duced their anx­i­ety level from 100 to zero and can now have a glass of cham­pagne and call the movers.

When your loan closes quickly, there is less risk of some­thing chang­ing in your life dur­ing the pro­cess­ing pe­riod prior to loan ap­proval. Many bor­row­ers don’t re­al­ize that there are ac­tu­ally two phases to the loan ap­proval process. The ini­tial phase of mort­gage un­der­writ­ing is ver­i­fy­ing your in­come, as­sets and credit. Your em­ploy­ment is con­firmed and the home is ap­praised. The fi­nal phase hap­pens a few days be­fore clos­ing and de­ter­mines if there has been a “ma­te­rial change” to the con­tents of your ap­pli­ca­tion.

So, what con­sti­tutes a “ma­te­rial change” to your loan ap­pli­ca­tion? Al­most any­thing! Dur­ing the loan-ap­pli­ca­tion process, there should be no change in the source of your down pay­ment, or in your job or in­come. And th­ese things should not hap­pen: miss­ing a bill pay­ment, ap­ply­ing for a new credit card, pur­chas­ing or leas­ing a car, mak­ing a ma­jor pur­chase us­ing credit, and mak­ing a large de­posit into your bank ac­count.

Any of the above events will slowyour loan ap­proval and can pos­si­bly cause your loan to be de­nied. To start off on the right track, get the re­quired doc­u­ments in or- der and ready for the un­der­writer. Th­ese min­i­mum stan­dard doc­u­ments are proof of in­come, fed­eral tax re­turns, and liq­uid as­sets in the bank and credit scores. Rely on your loan of­fi­cer and the mort­gage pro­ces­sor for a com­plete list of items.

Credit scores reign supreme in the ap­proval process. You can check your credit scores at no cost be­fore you ap­ply for a mort­gage. Do it and avoid de­lays. (Er­rors in credit re­port­ing are very com­mon.) Af­ter sub­mit­ting the re­quired doc­u­men­ta­tion to the len­der, stay in touch with your mort­gage loan of­fi­cer and the per­son pro­cess­ing the loan. Bor­row­ers who quickly re­spond to any re­quest will see their loans ap­proved quickly.

A fast, fast clos­ing re­quires at­ten­tion by all par­ties. Even to­day with all the elec­tronic no­ti­fi­ca­tions, if you team with knowl­edge­able mort­gage peo­ple the clos­ing will be fast.

Jim Gay was a real-es­tate bro­ker for 20 years and has been a con­sul­tant for For­tune 500 com­pa­nies. He is cur­rently a bro­ker/owner atThe Mort­gage Place, Inc. (986-9080) and can be reached at jim@ jim­gay­home­m­o­rt­gage.com.

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