Teresa Mears of U.S. New &
World Report, Money has written a great article about the documents needed when applying
for a loan. Thank goodness someone else is talking about this! I can’t
emphasize enough how much documents impact your loan timeline as well as your loan approval.
While this may seem more boring and makes you want to Stick A Fork In Your Eye, documents can make or break your loan. With documents, the devil
is in the details. You will submit your asset accounts (checking & saving
accounts, money market, IRA, CD, 401K, 403B, brokerage accounts, etc.)— any
accounts you plan to draw money from for your down payment and closing costs.
Supplying the proper documentation in the correct form can save you days of
frustration and loss of time. The clock starts ticking when you sign a sales
contract and everyone is working hard to get you to closing; so, if you do not
respond quickly to document requests, you are not only risking your mortgage
and your binder, you are also making it very difficult for the lender to
finalize full approval for your loan. Also, if you cut corners and do not send
documents in the proper form, you are burning time. Sending incorrect documentation
can burn up several days—a day for the request, another day sending incorrect
documents, another day the lender has to request correct documents… and so on.
If you want to be a proactive participant in your loan process,
pay attention to what is requested and what you send. Failure to provide the
correct documentation for loan approval will stop the loan process. If you are
not able to provide the requested documentation for the underwriter, sorry to
say, you will not be approved for the loan. I was working with a client last
year that sent a scanned copy of his wife’s driver’s license that was
illegible. After months of requesting a clear and legible copy of the driver’s
license, we finally received a clear copy and were able to move forward. Thank
goodness! Something as simple as taking a picture of your driver’s license with
your smart phone and emailing it to your lender is a silly thing to hold up
your loan closing.
Be prepared to get lots of documents and you will save yourself
time and mental anguish. I once had a client that was wondering why his loan
was not closing quickly. We had asked the borrower again and again for the
documents, but he just said he couldn’t find them. Unfortunately, as much as I
despise paperwork, if the underwriter needs it to approve your loan, you must
provide it. If you need help with the document format or where to find some
documents, just ask your lender. They should be happy to help you. If not, get
a new lender! Email me
at info@bestmortgagebook.com for my Free Checklist “Questions to Ask When Selecting a Lender”.
Many of the documents you are asked to supply, such as a driver’s
license or photo ID, are required by law. If you have questions about the
document requests— wonderful!— I can’t preach enough about staying informed.
Just make sure to ask your questions right away to keep the momentum going
towards full approval and a fast closing. As you’ll see in more stories below,
just a little attention can save tons of time and contribute to the smoothest
loan process possible. Although everyone is working for you via the fees you
pay them, they are also human beings working to get you a lump sum of money
that you would not have otherwise. Keep in mind that all of these people want your loan
to be approved and they have the best intentions in being your advocate for
loan approval.
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