Why is it that some lenders are closing real estate transactions in less than 21 days, yet some refinances are still in the works from last year? Why is it that an expense check that was deposited in my bank account last month is being sccruitinized by the underwriter and requires explanation? Why does my lender hate me?
While the process of obtaining a mortgage has tripled in complexity, if we all do a better job of setting the proper expectations, we can all endure the process better. Some things to keep in mind include:
1. your lender doesn’t hate you– she/he is in the service business and genuinely wants to serve you best
2. the more complex your financial situation, the longer it takes to get through the review process– think of the time it takes to read through the latest, best-selling novel versus War and Peace
3. A “Jumbo” loan is manually underwritten whereas a conforming loan has automated underwriting, which is the difference between an almost instantaneous decision and a decision that takes at least a day
4. large “Jumbo” loans may require up to two appraisals, which can be a two-week process
5. make certain that you disclose literally everything that may impact your application, i.e. change in job or career, source of funds for down payment and reserves, divorce, any new credit or any concerns with credit profile
6. both borrower AND property are being evaluated, so it’s just as important that the property meets minimum guidelines as well as the borrower– this can be especially tricky on condominiums since the complex must be approved as well!
For tidbits on how best to prepare for the mortgage process, consult with your favorite mortgage professional or stay tuned for future articles.