They say time is money, and that adage is definitely true when you're closing on a mortgage. Buyers and sellers are often highly motivated to get loans closed as quickly as possible. Because of the time-sensitive nature of these deals, you don’t want the mortgage application process to slow things down. The lender is required by law to provide you a decision within 30 days of the application. How quickly your application is processed depends on factors both within and outside your control.
The lender's application volume is the biggest obstacle that's beyond your control. Depending on how many applications the lender receives and how many people it has to process them, approval time can be very quick or can drag on for weeks. So it's important to ask upfront what the lender’s turnaround time is. If processing takes two to three weeks but you need to close in two weeks, you’d best find another lender if the first won’t be able to push the application through.
When the lender receives your application, it assigns a processor who inputs your information into its loan system. The input process is relatively quick, and it's typically done the day of application. However, the lender needs a complete application to accurately process your loan. If you leave items blank on the application, the lender has to send you a request for the missing information, which delays the process. If you don’t provide that information within 30 days, your mortgage request will be denied. To keep the process moving, fill out the application in its entirety. If any area is unclear, ask a loan representative before submitting it for processing.
When you submit your application, the lender requires financial documentation. This typically includes two years of W-2 forms and federal tax returns, one month of pay stubs and two to three months of bank statements. If any of this is missing, your application will make it through the input stage as normal, but the missing financial data will halt the process at underwriting. Again, this oversight will result to a request for the missing information. You must provide that information or risk being denied for an incomplete application.
To quickly move toward closing, the lender needs to get an appraisal as soon as possible. The appraiser will contact you to gain access to the property. The sooner he can inspect your house, the quicker the process will be. The longer it takes to come up with an appointment, the longer it will take to complete the report, which will take at least a day or two following the inspection. Keep your schedule as free as possible so as not to delay the process.