How to close my renovation loan fast...
I used to get asked this allot and not so much any more. Why is that? Lenders are always saying 45-60 days to close a renovation loan then many are taking 60-120. This is unacceptable by anyone in the business.
Lets look at a couple of those that say 45-60 and longer.
1) The order comes in and the uninformed lender starts gathering the information they need to get the loan in process.
2) Remember they already prequaled the borrower before the offer was submitted.
3) Now they push for their part of the loan process, gathering the necessary info to close the loan...
4) Get a contractor bid or two.
5) Once they have their stuff all together they call the consultant...
6) Now for the next five to ten days the consultant is harassed quite often pushing for the final report part to close the loan... it shouldn't have been the last thing. It should have been the first thing.
What is wrong with that picture? Simply this, when you have a team as necessary for this loan it isn't helpful to tie up one of the team members until you have all your job done and you are sitting at the finish line before passing the baton off to the consultant.
Typical time to close is 45-60 days.
How it should be...
1) Client is prequaled for the loan.
2) Consultant order is placed so they can work on their part at the same time as everyone else. What a concept right?
3) HUD designed the consultant portion of the process to take two weeks. We must do our due diligence. During that time the consultant will set up a time to inspect the property. Write his report, come up with a "scope of work" and a bid for that work that appears reasonable for this project.
4) Now it goes out to bid so contractor's can weigh in on the project.
5) A contractor is selected.
6) The final consultant report can now be turned in.
7) Close the loan
Typical time to close doing it this way is 21 - 35.
We have a couple of project going on five months and haven't quite closed and our work was turned in months ago. While credit issues come up from time to time it is imporant that you let your team do their work. We can all run down the field together and cross the finish line. I remember one of my favorite LO's who closed her first standard 203k in 21 days and rarely takes more than 30 days ever since. If you think it will take 45 days, it will, but if you think it will take 30 it will as well.