Agents are often asked by new borrowers, “What can I do to help speed up the processing of my loan?” We give them verbal information, but it is helpful to have it in writing, as there are five basic things that impact how fast a loan moves through processing.
The first is responding to disclosures as soon as we give them to you. By not responding it slows down the appraisal ordering process and the lender is going to need those disclosures back right anyway, so send them back! The second issue that comes up periodically is borrowers not filing their tax returns on time. Every borrower, salaried, self-employed, retired, unemployed, whatever, has to have the 4506T (request for tax transcripts) processed. No ifs ands or buts and there is no pushing the IRS.
After your loan is underwritten, usually the underwriter will send out a loan approval along with some “conditions.” These are usually documents that the underwriter needs in order to fully approve your loan. Loan officers tell borrowers to gather the items and send them in quickly. The underwriter has to review the items borrowers send in and that takes time. What the borrowers don't know or understand is that every lender wants all the conditions at once. It is more efficient for everyone involved to have the file looked at as few times as possible.
Another issue that can hold up processing, and therefore should be avoided, is bringing in money to close from undisclosed accounts. Agents should tell clients early on in the process about accounting for all the money needed for down payment and closing costs. And lastly, if additional money is needed for the down payment, and something has to be sold (stocks or bonds), it will take time. And it all has to be documented (the audit trail): proof you own the asset, proof you sold the asset, where did you put the money after you sold it, consolidating the money into one account to bring the check into escrow (obviously from an account that is documented).
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