Smooth and on-time closings

Engaged homebuyers are more likely to select a mortgage loan that meets their needs and presents few surprises during underwriting. The pre-application timeframe is critical and gives clients a chance to decide on a loan type and down payment amount before they are focused on a closing date.

• Make sure your clients feel comfortable they can afford the home and feel confident in their ability to receive a mortgage loan approval for the required amount.
  
• Encourage prospective homebuyers to review their credit reports early in the process. Through early review, they can find and correct errors to potentially raise their credit score and reduce their cost of borrowing.
  

Loan Estimates no longer require written documentation, so encourage your clients to compare offers from several lenders. This will avoid second guessing whether they got the best deal. Learn more about how the newly designed disclosures simplify the process.

• Loan Estimates show rates and loan terms in an easy-to-compare format, customized based on your clients’ credit and the details of their request.
  
• Clients who understand market rates are more likely to feel confident about their choices and work proactively and collaboratively with their lender.
  
• Loan Estimates are most useful when your clients define the requested mortgage type and compare “apples-to-apples” Loan Estimates.
  

Lenders have different policies about what your clients need to do to successfully move an application forward from the Loan Estimate stage into active processing, when the appraisal and other verifications typically begin. Talk to lenders serving your area to learn about those policies and discuss lender requirements with your clients to be confident that your clients have an active mortgage application underway.

Your clients might request a Loan Estimate and then feel like they’re done—but Loan Estimates expire after ten business days. If your clients do not complete the steps required by the lender to express their intent to proceed, their applications could be closed as incomplete. If this happens, your clients will likely need to start over with a new application. Learn more about what has and has not changed about the mortgage process.

Open lines of communication help prevent needless confusion and delays.

• Make sure your clients have detailed information they can share with their lender about property taxes, homeowner’s association fees, condominium association fees, and the estimated cost for homeowners insurance. Although the lender likely needs to verify these costs later, accurate numbers now can prevent revised Loan Estimates later.
  
• If anything about the transaction changes, communicate those changes promptly to everyone involved and confirm the information has been received. The lender determines whether the change requires a revised Loan Estimate. Your best strategy is to communicate any changes to your client and to confirm that the lender has received the information as well.
  
• Confirm the lender and the closing company have the buyer’s and the seller’s real estate broker information. Because this information appears on the Closing Disclosure, they both need correct and complete information.
  

Find out who will be preparing and providing the Closing Disclosure, when and how your client can expect to receive it, and how any last-minute changes are handled. Business practices can vary from lender to lender and state to state.

Previously HUD-1 Settlement Statements were most often provided by a settlement agent, attorney, or closing company. This may not be the case for the Closing Disclosure. Lenders may choose to prepare and deliver the Closing Disclosure to your client directly. They may deliver it through the mail, in-person, or electronically (if your clients have given permission for electronic delivery).

Find out if the lender or the closing company has a required timeframe for any change requests. Keep in mind that no matter who prepares or provides the Closing Disclosure, the lender is accountable for its accuracy and approves the final version.