With mortgage rates at all-time lows, purchase and refinance activity is climbing. And with guidelines tight, and pipelines full, you will want to be properly prepared up front to mitigate some of the horror stories you have probably been hearing about.
Home sales are at their highest levels since May 2010 as home buyers take advantage of favorable economic conditions. Home prices are low, household income is rising, and rents are up in many U.S. cities.
Low rates have stoked mortgage refinance applications throughout Sacramento, too.
With loan volume high, banks are nearing their respective capacities for underwriting and approving home loans. As a mortgage applicant, therefore, you’ll want to make sure that you’re taking whatever steps necessary to ensure that your home loan closes on-time, and without hassle.
You most important responsibility? Be responsive to your lender.
When asked for paperwork and/or supporting documentation, providing a 24-hour turnaround can keep your loan “top of mind” with your underwriter. This is important because underwriters are people and, sometimes, people “forget”. The fewer times that an underwriter has to “relearn” your file and its nuances, the better your chances for a speedy approval.
A secondary benefit to being responsive to your lender is that you’ll be less likely to miss your rate lock deadline which, too often, is a costly proposition for a borrower. Even if the mortgage market has improved since your original lock date, your lender may assess rate-lock extension fees equal to up to one-half percent of your loan size.
Other tips to ensure an on-time closing include :
- Disclose everything upfront. Your lender will find out anyway, so don’t under-disclose important facts. The more the loan officer knows up front, the better they are equipped to help find a solution or better set expectations.
- Be accessible. Your lender will often want to contact you by phone or email. Don’t lose days playing “phone tag”. Texting is great too. Quick and fast!
- When required, schedule your appraisal for as soon as possible. It’s easy to lose days to this part of the process.
- Don’t transfer any large sums of money from account to account without first letting your loan officer know. And when at all possible, explain any large deposits (over $250) that are not obviously “payroll” related into the accounts. Sourcing funds to close is a big, big deal, and underwriters will ask for this level of detail.
- Don’t open any new accounts or make large purchases without consulting your loan officer. Even something that seems minor, could hurt your loan approval or at a minimum slow it down.
- Don’t change jobs!
- Know that you are not alone, and there is a team of people behind the scenes, working to approve your loan. Having confidence and knowledge that you are working with an experienced and professional mortgage company is important. So ask your friends and family for positive referrals and don’t be afraid to ask the hard questions!
And, lastly, don’t challenge an underwriter’s request for “more paperwork”. Lenders want to see as little paper as possible. They don’t ask for information that’s not required to approve your loan.
Mortgage volume is expected to remain high through the end of 2012 and into 2013. Follow these steps to help close your loan on time, and with few headaches.