Why is it so hard to get my loan closed?
If you are finding yourself in week 5 of a process that feels very similar to a root canal, but without a decent magazine…you may have a bad lender.
If you every time you speak to your lender (when he/she answers your call) you get vague timeline answers such as “as soon as this is wrapped up, we will…” or “I’d expect that anytime in the next week or so we should hear about how long it will take to hear something”…you may have a bad lender.
If you call your lender to ask about a closing date and he suggests waiting until new calendars come out…you might have a bad lender.
In all seriousness, this is a common problem in this industry, painfully common. I can’t tell you how many horror stories I’ve heard about lenders unnecessarily missing closing dates. Now to be fair to lenders out there, if you decide that a week before closing is the time to finance that Mercedes you’ve been eyeing or you’ve been working really hard recently so it’s time to take a little break from paying credit cards, it may be a little of your fault, but a majority of the time when the loan process drags on and on it is because of a lack of knowledge or preparation by your lender.
The reason that preparation is crucial is that in lending every situation is different. Granted some are very similar, but asking you the right questions on the front end should give a skilled lender all the information they need to gather sufficient documentation. Some people are self employed, some hourly, some get money from a family trust, and some receive social security, etc., etc. Each of these situations present a different set of documents that are needed to quickly facilitate your loan and make the process as efficient as possible. Delays occur when you don’t know what to provide until week 3, then chances of closing in week 4 get slimmer by the day.
Now that I have sufficiently alienated what friends I have or did have in the banking world, let me throw a little disclaimer out there. Like many professions, we do have a reliance on third parties; title companies, appraisers, etc. For everything to go smoothly it is important that all parties be good at what they do and be communicative throughout the process. Does this always happen? No it does not, but the key phrase to focus on is “communicative throughout the process”. This professional courtesy must be extended to everyone involved in the loan process, especially you. If you are told that your lender will call you on Thursday and the phone never rings it doesn’t sit well with most people and it shouldn’t.
Being prepared and communicative are two strengths of seasoned lenders. Next time you meet with a perspective lender, ask him what strengths he has. If responds with how much he bench pressed in college, then it may be time to run. I make it a point to keep my clients involved and aware of where we stand and for that reason I feel that anyone I have the opportunity to work with walks away with a better understanding of how the loan process works and how easy it can be to refinance or buy a home.
So the next time you look at your spouse and ask, “Why is this process so hard?” Just remember, it doesn’t have to be.
If you have questions about to expedite your loan process or what you would need to get started feel free to contact me.
-Matt Brown
