Jumping Through Hoops To Get A Mortgage? Here's A Quick Fix

Ever here one of those stories in the break room how getting a mortgage is difficult? “I had to jump through so many hoops to get my mortgage, it was ridiculous. They keep asking me for financial information, I swear I already provided them.”  Reality check-obtaining a mortgage is no easy feat these days no matter how great your credit score is or how good your lender is. By understanding the loan process, you can sure you’re not jumping through hoops, more importantly, your loan closes on time….

The Nature of Mortgage Lending

Lenders are required to meet tight federal ability to repay requirements. This includes a thorough review and examination of your credit, debt, income and assets as well as the property and occupancy of the home in which you plan to be financing. Lenders operate in a world, where they usually only have a one time chance to make  how you look on paper favorable to the decision-maker, i.e. the underwriter, the person within the mortgage company who issues an approval.

Know this- the role of the lender’s underwriter is to mitigate risk for the mortgage company. They carry out this objective by making sure your full financial picture adheres to Fannie Mae and Freddie Mac guidelines. Fannie Mae and Freddie Mac set the benchmark guidelines that other lenders and loan programs model off of.

The reason why you’ll often hear stories about all the hoops to jump through is because the loan officer did not properly set the expectation with the borrower at the forefront of the loan process and/or the loan was not put together correctly. Remember it’s very difficult to create a second first impression- if your loan officer did not properly package the loan for the underwriter to thoroughly examine and subsequently sign off, then you may have a cumbersome process, that’s if the loan can be approved.

Following is typical mortgage loan process:

  1. Lender gathers your financial documentation
  2. Loan officer drafts a cover letter to the underwriter laying out the framework mortgage scenario
  3. Underwriter reviews the complete credit package ensuring the documentation adheres to risk requirements
  4. Underwriter a issues a disposition- a new loan status, approved with conditions or at times a suspense

The ideal outcome is the loan officer provided all of the necessary documentation preemptively demonstrating  how the loan package meets all the lending guidelines of the particular program the borrower is applying for e.g. Conventional loan, FHA Loan etc.

Pealing Back The Onion

When a loan status changes from pending to approved with conditions or suspense, the process is the same, there’s conditions the underwriter needs fufilled (missing documents or explanations needed) to issue a final loan approval. The reality is when the condition is provided, and that condition does not fully meet the original condition the underwriter had originally placed on the loan, that can become problematic because of the fact every time new documentation goes in front of the eyes of an underwriter, that could and oftentimes does create more conditions.

For example let’s say the underwriter is trying to document sufficient reserves for the program in which you applied for, but you provided only three pages of a five page bank statement. The underwriter then conditions for the additional missing pages of the bank statement. Well let’s say the additional missing pages of the bank statement shows multiple large cash deposits and subsequent funds transfers.

The underwriter then adds another condition for each deposit and transfer to be sourced and paper trailed. Make sense? Every time a document is provided to the  lender’s underwriter, there is always the possibility of the documentation provided to open more questions.

How To Fix A Runaway Loan Process

Simply start over. Doesn’t seem hard right? Well it actually is that simple. If your loan process has gone on beyond 45 days for a refinance and you’re being continually asked for more and more documentation, something is not adding up. Refinances usually take 30-45 days depending on the nature of your financial picture and whatever your lender’s operational work flow is like. Purchase loans usually take about 30 days as well too although sometimes longer depending on contractual dates. By canceling the loan process on a loan where either the financial information has changed so much to the point that it becomes a runaway financial freight train, then canceling the loan and starting over with fresh clean documentation is a quick and easy way to wrapping up your loan with less headache.

What you’ll need to pay attention to:

  • Changing rates and pricing-may jeopardize your interest rate lock- while pricing and terms of your loan is certainly important, ability to fund the loan is something else entirely. If you can be flexible on your rates and fees, this might be a favorable approach to pursue vs. beating a dead horse.
  • Getting a purchase contract extension-though not fun, might be necessary for the greater good of the transaction if the loan can be quickly repackaged and put in front of the underwriter again for a fresh clean review based upon the correct and or new financial supporting documentation.
  • Providing updated documentation– yes canceling out the current loan and starting a brand-new one is going to require a higher internal workload on the side of the lender, so do be gracious and help them out by providing them any updated financial information as needed as it will only aid your lending professional move your loan through the system to funding, quicker.

Tired of the hassle your lender is giving you? Get the clarity you deserve! Start by receiving a free no strings attached mortgage rate quote today!

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RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

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