My friend found their dream home in the mountains and was all set to move (the Uhaul was packed and everything!) before they were informed their mortgage file was delayed in underwriting and they were not going to close by their original closing date. While I was on-hand to commiserate with them, I bit my tongue when it came to saying this scenario was avoidable. There are three main factors that often delay a file in process or underwriting, and it behooves you as a borrower to know these potential pitfalls before you advance through the mortgage lending process.
The first mistake is the borrower did not fully disclose something of importance. This usually arises once underwriting delves into bank statements to track payments. An example would be if the borrower is getting or paying spousal support, or perhaps there is another property that is owned. Saying, “it’s not something we really use so I didn’t think it was important” is not going to be of benefit to you or the company you are trying to get the mortgage through. Scenarios like these impact a borrower’s ability to qualify and could derail your loan approval, or cause significant delays.
Second, and this sounds simple but you would be amazed how frequently it happens, missing pages from bank statements. It is actually the most frequent request for additional documentation as your mortgage loan is being processed. Here’s a word to the wise: if the first page of your bank statement says: “Page 1 of 4,” you will need all four pages regardless of information on any of the pages. Do me a favor and remember that. It doesn’t matter if there is nothing on those pages, one is just legal jargon, another is an advertisement and the last one is contact information. The underwriter has no idea what is on the missing pages. For all they know, one of these pages shows a loan not on the credit report, a series of large deposits or large transfers, or another account.
Finally, respond and acknowledge requests for items or actions. Best practice calls for providing your lender with a time frame when you will be able to provide what is needed. This not only lets the company know you are aware of what is needed but also when they can expect what is being requested. It’s always going to benefit you to be upfront from the onset and keep lines of communication easier.
I get asked a lot how to make the loan process easier. If you hit any snags as you progress through the mortgage process, it is going to be okay. Be prepared and be responsive, it will make clearing the hurdle that much simpler. Our sales staff has some of the most knowledgeable and hardworking individuals in the industry. We are confident we are the company you want with you on your journey of homeownership. Give us a call today!