by LC Wong Apr 02 2013
Close Your Loan Right Next Door….Quickly!
My last three purchase loans had closing documents to the title company well within two weeks of loan submission into processing. Needless to say, my realtor partners were very happy in getting their commission checks early!
If you’re in need of a quick close on your purchase loan, you’re not alone.
As the Spring housing market is off to a running start, reports of multiple-offer and cash-offer situations are more common nationwide. Homes are getting bid up in markets such as San Francisco, California and Phoenix, Arizona where even homes in foreclosure and in short sale situations have generated bidding wars.
According to mortgage-origination software provider Ellie Mae, the average time required to process, approve and fund a purchase mortgage is up 12% since last March 2012 where it took approximately 42 days to close a purchase loan to presently taking approximately 47 days to close a purchase loan.
There are two key reasons for processing delays. The first reason is that mortgage rates are low and the demand for mortgage loans is high. The pipeline for purchase and refinance transactions are at a multi-year high.
The second reason is that mortgage lenders underwrite home loans differently today as compared to last year. Government regulations require home loan applications to be reviewed for completeness and compliance which require more additional time. And there are more changes in government regulations to be expected in the coming year which can contribute to longer purchase turn times.
We all know that not everyone can be the highest bidder, however, some home buyers can have another advantage in making an offer by proposing to close within 30 days versus a home buyer that requires 45-60 days or more to close with their lender.
If you are planning to buy your next home with a mortgage and you expect to close quickly, there are some basic guidelines you can follow to help your loan get approved and closed as quickly as possible.
Get your Purchase Loan Approved More Quickly
For buyers in need of a quick closing, there are some external factors that are beyond your control. For example, the title search and the appraisal report are completed by an external third party company and depend on the cooperation of external parties.
However, here are some steps to take to assure your loan is approved expeditiously.
The first rule of thumb is to work with a very experienced mortgage loan consultant.
My name is Lillian Wong, your local iMortgage Loan Consultant and I have been in the mortgage industry for over 20 years in both California and Arizona. After completing my education with an undergraduate finance degree and obtaining my real estate license, I have worked for various mortgage lenders and banking institutions as an originator, underwriter, processor, closer, and auditor. My mortgage experience covers the mortgage loan spectrum from government, jumbo, investor, manufactured home, Homepath, 203K, renovation, and reverse mortgage loans. With many years of experience and a wide selection of loan programs, I will provide you with up-to-the- minute status of your loan and walk you through the loan process every step of the way.
The second rule of thumb is to be prepared.
When you’re buying a home, be prepared to provide the most commonly required verification documentation: your 2 most recent paystubs, your last 2 year’s W2 forms, your last 2 year’s tax returns, your 2 most recent bank statements, and a copy of your driver’s license and social security card.
Furthermore, if there are any unique credit situations such as a bankruptcy, short sale, or foreclosure; child support or alimony payments; or gift funds; or large transfer deposits for the down payment; you will need to have the relevant supporting documentation handy.
Gathering the paperwork can be the most time-consuming step in the mortgage approval process. You can get a head start and consider keeping them in a folder or scanning them and have them ready for your lender. This can save so much time off your approval and help you reach your financing contingency dates more quickly.
Be upfront and open with your lender even if you worry that what you share may harm your approval and inform the lender of any life-changing plans and hold-off on any major credit purchases. There are three reasons for this.
The first reason is that withholding information from your mortgage application can constitute fraud which is a far worse outcome than not getting the mortgage approved. The second reason is that your mortgage lender will usually uncover what you’re not sharing anyway. The third reason is that there are certain credit and ratio tolerances that have to be adhered to by the underwriter and if the credit profile changes or deviates above the tolerance levels, these changes can delay the closing,
As part of the mortgage approval process, a credit and public records check are performed and various occupancy and identity tests and employment verifications are conducted by an underwriter. The more information you share with your lender, the more equipped the loan consultant will be to help you get to closing quickly.
The third rule of thumb is to get pre-approved.
Home buyers with a pre-approval letter in hand at the time of an offer can typically reduce closing time by one week or more. For the pre-approval process, a lender will take a complete loan application, run credit, review income and asset documentation as well as note specific loan traits such as child support, credit issues, down payment source, co-signor requirements, and run the loan scenario through an automated underwriting engine with a sample sales price, property address, property taxes, homeowner’s insurance, and homeowner’s association dues where applicable.
Buyers with a pre-approval letter can often move immediately to underwriting upon writing a contract. This step can also save one week or more in the mortgage approval process.
For today’s home buyers, pre-approvals can speed the loan approval process and get you to closing quicker which can be a competitive edge in today’s improving housing market conditions where the average purchase closing time is 47 days which can be too long for some sellers.
See how much home for which you can qualify and get started with the pre-approval process today.
The steps are fast and free. You can start right here online…simple as that! ®