Mortgage brokers and lenders agree to the fact that mortgage loan processing is a time-consuming and frustrating process. The entire mortgage lifecycle- including processing, underwriting, and closing requires a large amount of documentation, thereby delaying the entire process. At the same time, if planned properly and carefully, mortgage loan processing can be streamlined to achieve better customer satisfaction and efficiency. Therefore, before embarking, one needs to understand the different requirements and complications in the mortgage loan processing process and plan accordingly.
After the major mortgage crisis in 2008, government guidelines which regulate lending have become tighter. Thus, mortgage loan rejections have soared up to about 26-50% of the loan applications. Therefore, it is imperative that you take all the variables of the loan processing process into account. Carefully planning and following some of the basic mortgage loan processing tips here can simplify the entire mortgage loan processing process for you.
Top 10 Tips to Process Your Mortgage Loans Effectively
With the mortgage interest rates being low right now, it is a good time for people to apply for loans and become home owners. With careful planning and preparation this process can be simplified so that you can focus on the more important day-to-day activities. In this article, we have listed important tips for mortgage processors which can be followed to streamline the entire process -
Get Pre-approved Loans
Getting pre-approved loans will help you determine how much you can afford and gain a realistic expectation of the price range of your new house. People who are pre-approved with a loan amount from the lender are expected to finish the loan processing at a much faster rate. With pre-approval, your loans are processed in a more efficient manner as compared to others.
Get Your Documents in Place
All necessary documentation such as pay stubs, bank statements, tax returns, etc. must be assembled much before you even start searching for houses. Getting these documents from different sources usually takes time and hence it is better to be prepared for the delays and start well in advance. You can always ask your local bank for a mortgage loan checklist if you are unsure of the documents which are required by law. Getting the documents ready well in advance will help in getting the loan processed faster.
Avoid Any Unnecessary Credit Checks
Unnecessary credit checks involved with financing offers and promotions must be avoided in every case. Excessive credit checking can be responsible for lowering your credit scores in many cases, even though your credit history does not reflect the same. This can result in reducing the chances of getting your loans approved in a timely manner.
Reduce the Debt-Income Ratio
Paying all your credit card bills and pending loans will only boost your personal credit score. This also lowers the debt-to-income ratio and increases the chances of getting the mortgage loan approved. If you are looking for a guaranteed home loan approval, then it is advisable to pay all your existing debts and not to take on new debts till you have closed the mortgage loan.
Keep Substantial Reserves In your Bank Account
A large decline in the bank balance could cause the rejection of home loan applications. Therefore, always try and keep as much as funds in the account as you had reported in the initial application form. Also, avoid any kind of NSF fees or overdraft fees at all costs since they can be difficult to overcome.
File Your Taxes
If by any chance, you have not filed your taxes in the past two years, then it is advisable that you contact your loan officer immediately. They are supposed to receive your tax transcripts to close on your mortgage loan. The only exception is this case is if you did not have a taxable income for which it is not necessary to file your taxes.
Avoid Changing Jobs
Try not making any major career change during the home loan application and closing time. A career change may require a longer check of your history before the income is incorporated in the loan application. A job change may also initiate a lot more paperwork and hence delay the home loan closing even longer.
Avoid Depositing Large Amounts in your Bank
All the funds in your bank account need to be properly documented. Any funds exceeding an amount of $500 will need an explanation letter and supporting documents stating the source of the funds. Gift funds can be received only from relatives and will also need specific documents. Any untraced amount deposited into the account can therefore delay the loan approval process even longer.
Keep Money for Closing Costs
The lender will need adequate proof to know that you have enough funds to make payments towards the closing costs. This may include the down payment and other closings costs prior to closing. Be ready to do immediate payments, either by wire or through cashier's check on the day before closing.
Work with An Experienced Mortgage Lender
It is important that you work with an experienced mortgage lender during this time. If you are working with a broker or directly with a lender, it is important to ask all questions you deem important from them. Basic questions may include the average time to process an application and how quickly they will be able to complete your mortgage. It is important that you anticipate potential setbacks like any employment or credit-related problems.
Choose Flatworld for Streamlined Mortgage Loan Processing Services
Flatworld Solutions has been providing top-quality mortgage loan processing and other mortgage services to clients around the world. Our team of highly experienced mortgage experts can understand different requirements with ease and provide the necessary services as per your requirements. We can handle all your paperwork and perform adequate follow-ups so as to assemble all the documentation needed for fast and efficient loan approval. Working with us will help you achieve better customer satisfaction, increased revenues, reduced processing times, and reduced expenditure on hiring and training staff.
If you are looking for a reliable, efficient, and cost-effective mortgage loan processing services then you have come to the right place. Get in touch with us or talk to one of our representatives and we will be more than happy to help you out.