Mortgage closing can be quite complex and time-consuming in nature. As a result, lenders are usually looking at longer mortgage loan closing cycles than other lines of credit would entail. However, lenders can speed up the mortgage closing process by making sure that a few key areas are looked after from the very beginning. Some of these include creating a mortgage loan document checklist, ensuring that borrowers get pre-approved for the mortgage loan, and ensuring that borrowers have sufficient funds available as and when they are called for. Let’s explore these 3 key points to understand just how you can speed up the mortgage closing process and improve your loan processing times.
Ensure Borrowers Get Pre-Approved First
It is important that lenders ensure that borrowers get pre-approved for mortgage loans as it speeds up the mortgage closing process. Obtaining pre-approval also helps borrowers evaluate how much they can afford and gives them a realistic price range to work with for the new home. Buyers who have been pre-approved for a mortgage loan are often those who are able to finalize their mortgage application quicker and more efficiently than buyers who have not been pre-qualified. Thus, it is important that lenders look for pre-approved conditional mortgage loan candidates. In this way, loan closing processing times can be cut down and more mortgage loans can successfully be generated in the same amount of time.
Create a Mortgage Loan Document Checklist
It is critical that borrowers assemble their pay stubs, bank statements, tax returns, and other vital documents as soon as possible. These documents should be collected long before they even begin looking for their new home as it can ease the mortgage closing process considerably. Because many of these documents take time to generate and even longer to be processed, the faster your borrowers prepare them, the sooner their mortgage loan will be approved. Giving your borrowers a mortgage loan checklist will go a long way in ensuring that they are prepared when the time comes to submit these critical loan documents. By having them adhere to this checklist, you can better ensure that all the required documents are there when you need them, and that no information is left out to stall the process.
Confirm That Borrowers Have Sufficient Funds Available for Loan Closing
Lenders will require evidence to establish whether a borrower has sufficient funds to cover the closing costs and down payments prior to closing. It is the mortgage lender’s responsibility to ensure that these funds are readily available during the mortgage closing process. Lenders should also encourage their borrowers to avoid making large purchases or switching jobs prior to taking out a mortgage loan as this could suggest insufficient funds on the borrower’s part, making them a greater credit risk. The lower the credit risk a borrower poses to the lender, the faster their mortgage closing process will be. It is vital that lenders ensure that the borrowers they are working with have sufficient funds to cover all closing costs as they would have wasted their valuable time and resources otherwise.
There are a few critical points lenders need to keep in mind during the mortgage closing process in order to make closing seamless. These include ensuring that your borrowers are financially stable and have the funds to cover all closing costs, ensuring that they have been pre-approved for the loan, and following a mortgage loan document checklist. Lenders can accelerate the mortgage closing cycle by paying intense attention to these key areas.