5 Guidelines for Closing a Mortgage Loan
There’s no such thing as a mortgage half-closing or 99%-closing. Either a mortgage closes or it doesn’t. Simple. It’s your job to see your client’s mortgage loan through to completion and prevent a promising deal from going up in smoke.
Get your clients over the mortgage goal line with these five basic tips:
1. Educate Clients on Closing Pitfalls
Does your client realize that pre-closing activities like opening new credit card accounts or making unrelated large purchases – for example, a full set of furniture to go into their prospective new home – can affect the closing process?
It’s up to you to make sure that your client understands not only all of the steps involved in the closing process, but also any actions that can threaten a deal. When homeowners grasp how lenders assess risk in the broader picture, they are more likely to avoid costly mistakes.
2. Take Pre-Emptive Actions on Potential Delays
Look for any potential landmines such as an unclear title, unpaid taxes, lack of homeowner’s insurance, or an unfavorable home appraisal or inspection as early as possible. Make sure that your client understands the correct order of events to avoid potential delays and acts on items in a timely fashion.
3. Give Your Clients a Closing Checklist and Process Walk-Through
For the first-time homebuyer, the closing process can seem like humorist Dave Barry’s “Ritual Closing Ceremony” where you “go into a small room and write large checks to total strangers” and “frown with feigned comprehension at various unintelligible documents.”
Even seasoned homebuyers can be overwhelmed by the panic of the moment – especially since large checks are involved.
Give your clients a checklist of the steps involved in closing. Walk them through the process in detail, highlighting common pitfalls. Make sure that your client receives the closing disclosure in advance and gives it a proper review to address any questions before closing.
4. Maintain Regular Contact with Clients throughout Closing
Assumptions are dangerous. Communicate regularly with your client to ensure that things are going according to plan. It may mean dialing the client on your ride home to make sure everything is in order when you’d much rather be calling your special someone to discuss dinner plans.
Pay special attention to the closing disclosure and address any last-minute concerns that the client may have – but don’t forget to check on the client’s concerns throughout the process (see pre-emptive action above). Again, the primary goal is to increase understanding and defuse wide-eyed panic. Keep in mind that just because you handle five- and six-figure checks regularly doesn’t mean your clients do!
5. Perform a Final Check on Financing
Presumably, your client understands the basics of financing, and you will already have dealt with basic financial question like pre-qualification versus pre-approval. As closing approaches, it’s time to make sure your client has the funds lined up to deal with all expenses and fees. A closing ceremony is not the time to be scrambling to cover an unanticipated financial shortfall.
Support Your Clients to Ensure Mortgage Loans Close Quickly
Don’t leave your clients on the one-yard line wondering what happened to their dream home. By running interference and addressing potential pitfalls, you can help your client cross the mortgage goal line with ease. When the client reaches his or her goal, everybody wins. Then you’ll truly enjoy that fabulous dinner with your special someone.