As the year comes to an end and we enter December, the crunch begins to meet year-end closing deadlines. There are a number of reasons why people want to close by the end of the year, but most of them revolve around taxes. And I find that every year during this first week of December, I have a flood of clients who either need to expedite a mortgage that is already in process or start a new application and close within the month. And so I figured I’d write this up and share it with everyone reading my blog, so if you ever find yourself in this situation, you are prepared.
The first thing you want to understand is: what is the average closing time of your lender, and what is their best case scenario for your closing. If you are working with a bigger institution, like a bank, for instance, there is much more “process” involved in each step of the mortgage process. And what I mean by that is that many of the mortgage officers do not control how long it takes to clear underwriting, to clear title, or to get the appraisal scheduled. And while a mortgage bank may be able to fast track your application and get an underwriter to review your file and list stips in a day, a larger institution may consider 3 business days “fast.” This additional “processing” time can kill your chances of closing by year end.
Next, you want to work with a mortgage officer who has set a clear expectation for document requests. Now, there is always a chance that something strange will come up when title is pulled, credit is pulled, or tax documents are reviewed, but if you have a good idea of what you will need, and you get that to the mortgage officer up front, you will have a much better chance of closing on time, because the mortgage officer can give that paperwork directly to the underwriter when it is requested.
Another important question to ask is where the underwriter is. If the underwriter sits two desks down from the mortgage officer or on the next floor, it is easier to get a document processed quickly than it is if the underwriter is in Texas and the loan officer is here in Michigan. Having the ability to hand deliver documents and discuss stips is a huge time saver.
Finally, be proactive and timely. If the mortgage officer tells you you will likely need certain documentation, get it together. It is better to do a little extra leg work and not need it than to find yourself scrambling. Similarly, get documentation back to the loan officer as quickly as possible. A day here and a day there getting paperwork together can be just enough of a delay to kill your timing. In many cases, appraisals can’t be ordered and title can’t be pulled until certain approvals are made. And if you need to get that documentation in to get that approval, your one day delay can mean a multiple day delay on those other pieces of the puzzle.
If you have any questions about closing a mortgage by year end or if you need a preapproval letter, please contact me. If you have any tips to add for closing by year end, please leave a comment.