Tips for a Successful Home Mortgage Loan Closing
“Can you close on time”?
Over the years most borrowers and/or their Real Estate Agents ask us at Mortgage Tree Capital the common question “can you close on time”? Not closing timely for borrowers can be a costly blunder; it can cause the borrowers to lose their good faith deposit, increase costs associated with your move or interest rate, and cause your mortgage loan to permanently stall and never get funded.
The Application Process
The information you provide on your mortgage application will be verified by your loan officer, your underwriter, and by a 3rd party verification service as part of the approval process. The same information will be re-verified before funds are released to make your home purchase or complete your refinance. We have developed a list which understanding your part of the closing process and being prepared are very important factors in making your closing go effortlessly.
Refinances and Purchases
• Don’t apply for or acquire any additional debt until after your loan has closed.
• Don’t Increase balances on credit cards and/or equity lines of credit.
• Don’t close any accounts without instruction from your loan officer
• Don’t open new installment loans of any kind.
• Don’t co-sign any type of credit on behalf of another individual.
• Don’t start any new real estate loans.
• Don’t make any large deposits into your bank account(s).
• Don’t deposit gift funds into your bank account(s).
• Don’t change jobs or take a leave of absence for any reason.
• Don’t reject (if requested) the option to receive disclosers by email to instead receive them by postal mail. Postal mail requires an additional 10-15 day waiting period(s) thus stalling your mortgage loan 10-15 additional days.
Undisclosed Debt Monitoring
Many mortgage borrowers, including those with high credit scores and low debt-to-income ratios, apply for at least one new trade line during the “quiet period” which is the time frame from when we approve you till the time your mortgage loan is funded. At the same time, these borrowers are unaware of how this new “undisclosed debt” impacts their ability to qualify for their mortgage. We have a system in place called UDM (Undisclosed Debt Monitoring) which alerts us instantly when your credit is pulled and this alert will automatically stall your mortgage loan and affect your loan approval.
As temping as it may be the buyer, the seller, or their agents should never negotiate short (under 30 days) closing periods on FHA, VA, USDA, and down-payment assistance programs as these can take up to 40-45 days.
• Fixers cannot be purchased with less than 20% down.
Adhering to the above will ensure a smooth and successful closing