Consumers who are looking for a home loan can have five documents on hand to cut down on the time it takes to process a mortgage and improve the mortgage shopping experience.
The amount of time it takes to close a home loan has increased, according to 64 percent of LendingTree.com network lenders who participated in a recent survey by the Charlotte, N.C.-based company. The average turnaround was 45 days on a refinance and a little less to finance a home purchase.
The longer timeline is the result of lower interest rates, which have produced a wave of borrowers looking to lower their rates by refinancing.
But consumers, most who don’t keep up with regulatory and policy changes in the mortgage industry, might be unaware of a few documents that can smoothen out the loan process.
LendingTree, which advertises for online loan shoppers then sells the leads to mortgage companies, said that prospective borrowers should be prepared to verify two years’ income through W-2 forms or federal tax returns.
They will also need to provide documentation of their income so far this year. This might be done by using a paystub with a year-to-date total.
Consumers should also have the latest statements on hand for loans and credit cards. Credit reports might not update balance and payment data as quickly as the applicant’s own statements.
Three months of statements for bank accounts and investment accounts should gathered by the consumer.
LendingTree also recommends that the consumer be prepared with an updated credit report.
Homebuyers should additionally be prepared with two fully executed purchase contracts.
People applying for a refinance should have a copy of their current homeowner’s insurance policy and the most recent mortgage statement.
“Doing the groundwork before entering the loan process will allow for a smoother transaction with less frustration,” LendingTree Founder and Chief Executive Officer Doug Lebda said in the announcement. “Although lenders are flooded with volume, borrowers who come to the table prepared will increase lender efficiency and will allow for a shorter closing timeframe.”
