Just to recap, an underwriter may require additional documentation to complete your loan packet. What is requested can vary vastly from needing an updated bank statement that confirms you have ample funds to close to re-signing a form that isn’t very legible. Every lender is different and some are more stringent than others regarding lending guidelines and what is and is not acceptable. To help your loan process flow smoothly, keep a paper trail of everything, as you never know what might be needed.
Another potential hurdle to closing on schedule is entirely dependent on you. A lack of submitting paperwork in a timely manner can potentially delay your closing. When your lender requests updated pay stubs, bank statements, or tax returns, submit this paperwork promptly. Your file cannot be submitted to the underwriter, until it contains the lender’s checklist of essential documents. Truth-in-Lending Disclosure forms must be signed and returned, complete tax returns must be submitted, and all pages of the bank statement (even if it’s blank) are needed. If you collect child support and used that income to qualify, expect to provide the lender with supporting documentation, such as a court ordered notice. Mailing this paperwork can cause delays, so email, fax, or drop off this information whenever needed, confirm receipt, and keep a copy just in case anything is overlooked or misplaced (there are hundreds of papers involved in just your file alone and countless people applying for loans). If there are days before you can get to a bank to obtain an updated bank statement, this can potentially delay your closing. So, whenever possible, submit any needed information as soon as you can.
Gift funds need to be documented properly. The loan officer should detail the manner in which gift funds should be handled. When it comes to an important issue such as this, do not improvise if you do not understand the request or find it to be too much to ask of the gift giver. Doing anything other than what the lender has advised, may not only delay your closing, it may prevent you from closing on your dream home. The lender generally needs to see a bank statement from the gift giver, verifying the funds in their account prior to gift funds being withdrawn. Or, the lender may accept a letter from the gift giver’s bank, signed and dated on their letterhead with a business card attached, explaining that the gift giver had more than enough funds in their account to cover the gift amount. The lender may also need to see a copy of the gift check and will need a copy of your updated bank statement, reflecting your account balance before and after receipt of the gift funds. To ensure that you perform this task correctly, feel comfortable calling your lender as many times as you need to for clarification.
The potential closing hurdles that have been highlighted are not all-inclusive. There are many other issues that may delay your closing. By picking the right team to assist you in your homeownership goal, and staying abreast of what is required of you, many of these issues can be minimized or averted. As with any goal, remain focused on your objective, recognize that obstacles may occur, brainstorm with your team of experts on options, and continue to press forward positively, expecting the best.