Every borrower wants their mortgage closing to be simple and stress free. While it may not always feel like it (between loan processors' requests for your 2011 Schedule E and page 6 of March's bank statement), lenders want the same thing. Here are some timely "do's and (mostly hypothetical) don'ts" for borrowers to consider during the loan application process. While no single list can completely cover all loans, following these "do's and don'ts" during your mortgage application process will help you close your loan faster, sleep better at night, avoid premature gray hair, and help your loan officer give you the best service possible. Look for more helpful hints soon, and happy mortgage hunting!
DO: Ask your loan officer questions and listen to his/her answers.
DON'T: Solicit mortgage advice from your cousin's hairdresser who had a real estate license in 1995 and almost sold 3 houses.
DO: Promptly provide all documents requested by your loan officer and processor to speed up your closing.
DON'T: Leave out pertinent details on your loan application, such as that pesky pending lawsuit, the layoff notice you just got at work, your unpaid child support, or the fact you haven't actually filed a tax return since 2009.
DO: Check your email frequently during the loan process for questions and updates from your lender and respond to any requests they have.
DON'T: Start a loan the day before you go on a two week camping trip with no cell phone or email access.
DO: Make sure you and your loan officer discuss your rate lock, agree on when to lock, and have a plan for closing by lock expiration date.
DON'T: Instruct your loan officer to lock the rate, then ask him a week later if he can improve it because you heard a radio ad stating rates dropped and are now "THE LOWEST EVER FOR THE 19TH CONSECUTIVE WEEK!!"
DO: Be comfortable with and confident in your loan officer and loan before you submit a formal loan application.
DON'T: Start the loan, then "check around" with 6 other lenders "just to see what they have" the week before your closing.
DO: Make sure your employment, asset, and personal information are correct on your loan application.
DON'T: Become gravely concerned because the credit card balances on your credit report aren't identical to the current balances.
DO: Know the rate and balance on your existing loan.
DON'T: Miss the important subtlety of actual "payoff" balance of your loan, which will include interest charges and will exceed the principal balance.
DO: Ask about how your new escrow account is determined if you are unsure.
DON'T: Change your homeowners' insurance the day before closing.
DO: Ask for a written loan estimate before you start the loan, and discuss it thoroughly with your loan officer.
DON'T: Rely on vague statements such as "I'll get you a great rate", "don't worry about the new loan size", or "this is an awesome deal."
DO: Feel free to ask your loan officer questions during the loan process.
DON'T: Leave 3 voice mails on his cell phone on Memorial Day, then wonder why he didn't get right back with you.
Lastly, most importantly:
DO: Check Mortgage News Daily to see if your loan officer is a member.
DON'T: Rely on pop-up internet ads promising rates 2% lower than you've ever heard of for reliable mortgage information!
