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September 16th, 2011

Here’s how you can get the lowest mortgage rates available



close-fasterWe all know that the “most qualified” borrowers–those with the highest credit scores, solid incomes, strongest payment histories, and either a substantial equity stake or large down payments–have access to the best mortgage rates available.

But there’s another way borrowers can make sure they have access to the lowest possible mortgage rates:

Close quickly on your loan.

“If you want the lowest mortgage rate possible on your next home loan, be ready to close quickly,” writes Dan Green, loan officer and writer for HSH.com.

View current mortgage rates in your area

“The quicker you close, the better your loan terms will be.”

In Green’s latest article, titled “Close quickly and get better mortgage rates,” he explains that in his experience, time is certainly of the essence. While you can’t tell your underwriter to hurry the process along (although I’m sure you wish you could), there are three things you can do on your end to speed the process along:

1. Return your initial loan disclosures within a day

“Every closed loan begins with a set of initial disclosures–a combination of federally- and lender-required documents detailing your loan terms and the responsibilities of both parties in the transaction,” explains Green.

Included in this set of paperwork, among other things, will be your loan application. Green explains that when going over this paperwork (which runs about 40 pages), there are two main things to keep in mind:

  1. These are your initial loan disclosures–not your final ones. There may be small errors.
  2. Your lender is available to explain what you’re signing.

Note: Your Rate Lock Agreement is included in the packet. “If your rate is locked, the clock is ticking. Therefore, review and sign your initial loan paperwork as soon as it arrives. If you need a walk-though, call your lender.”

Want to save even more time? Green’s bonus tip is this:

Ask your lender to email you this paperwork. “This will save at least one day in transit time,” writes Green. “You can save two days or more if your lender allows you to email the disclosures back.”

2. Return your “supporting paperwork” within 72 hours

Again, it’s all about speed. Right around the time you receive your disclosures paperwork, you’ll also be asked for a host of supporting paperwork–some documents will be easier to gather than others.

The easier items to locate will be a W-2, bank statements and federal tax returns.

The docs which may prove a little harder to locate can include canceled checks, employment agreements and proof that a given collection has been satisfied, explains Green.

Green’s bonus tip:

“When you’re collecting supporting documentation, don’t send it to your lender until you have all of it (unless you’re told otherwise). Paperwork is easier to keep track of when it’s sent as one, big stack.”

To read Dan Green’s third tip to locking in the lowest mortgage rate, continue reading his article, “Close quickly and get better mortgage rates,” in its entirety.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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