You don’t want to lose out on owning your dream home just because your mortgage didn’t close soon enough. In a hot market where sellers are having no difficulties finding potential buyers, closing quickly can put you ahead of the competition.
If you have to spend a long time waiting for the underwriting process to finish up so that your mortgage can be approved, you might be passed over in favor of a buyer that’s ready to go.
So, how can you speed along the process? Here are some tips to hurry along the mortgage underwriting process and close it quickly, keeping you ahead of the game and first in line for your new home.
[Related: Guide to Closing Costs in Washington State]
Ask Your Lender the Right Questions
Before choosing a lender, make sure you’ve done your research to make sure they’re the right fit for you and your situation. An ideal lender should ask you for your income, assets, and other determining information right away so that you know whether or not you’re qualified to apply immediately.
Once you find out what loan programs are available to you, ask what exact documents and information is needed to start the preapproval process, and what a potential timeline and turnaround looks like.
Find out about how long their interest rate locks are in effect. A rate lock sets a specific interest rate for your loan regardless of the shift in mortgage rates “on the outside.” If your locked-in interest rate is only for 30 days and it takes 60 days for your mortgage to be approved, then you will need to pay the interest difference. Try to find a lender that will lock in your interest rate for the same amount of time, if not longer, than the length of the underwriting process.
[Related: Understanding Your Home Loan Options]
Check Your Credit Score
Check your credit score and make sure it is free from any errors or dings that could be negatively impacting the number. According to the Federal Trade Commission, one out of every five consumers have errors on their credit reports. Many credit report companies will allow you to dispute any errors at no cost, so make sure you feel confidently about your report before applying for pre-approval.
Knowing your credit score can also give you an advantage, timewise, when searching for the right loan program, since you’ll know what types of mortgages you are most likely to qualify for and won’t need to waste your time applying to ones that only accept higher scores.
Gather Your Financial Information
Make sure you have all the necessary supporting documents ready to go for the pre-approval and mortgage underwriting process. Lenders will typically ask to review the following documents, so have these on hand:
- Government-issued identification, such as a driver’s license or state-issued I.D. card
- At least two years of income-verifying tax forms, including W2, 1040, or 1099 forms
- Two to three months’ worth of pay stubs
- Bank and asset statements
Once you’ve chosen a lender, try to get pre-approved. If you’re pre-approved before you even start looking for houses, you’ll have a better idea of your budget (both in total and broken down into monthly payments) so that you can focus on homes in the price range you can comfortably afford.
[Related: Think You Know How to Find Your Credit Score? Think Again]
Avoid Major Life Changes
During the time you’re waiting to close your mortgage, avoid making any major life changes. Things like changing or quitting your job, opening up a new line of credit, or making large purchases may alter your credit score and disrupt the underwriting process.
Be Available 24/7 to Answer Questions
One huge mistake that ends up wasting a ton of time is getting into an unnecessary round of “phone tag.” Lenders are usually busy helping multiple people get their mortgages processed, so if they call you to ask a question or to clarify something and you don’t answer right away, they’re most likely going to move onto the next individual and only get back to your application when it is convenient for them.
Be ready to answer phone calls and emails promptly so that your lender can get their job done and you can close your mortgage quickly.
Cut Time by Going Online
Opt to use electronic payments, e-signatures, and other (secure and verified) online methods of communication whenever possible. When a lender can directly contact your bank, or verify other financial information without having to make a trip in person or send something by snail mail, you can end up cutting your closing time by weeks.
Make a Confident Offer and Stand Out to the Seller
Finally, you can gain your competitive edge even while waiting for your mortgage to close by making a confident offer and standing out to the seller. Tactics such as writing a persuasive letter about how much you love the property, putting down an earnest money deposit, or being flexible on contingencies can help you prove to the seller that you’re the right choice — even if your mortgage takes a bit longer than anticipated to close.
Contact Seattle Mortgage Planners Today
Seattle Mortgage Planners has years of experience helping new and existing homeowners navigate the real estate world. Whether you’re looking into refinancing options or the home loan process, we’ve got you covered.
Contact us today to set up a consultation.