How Long Does it Take to Close a 203K Loan? It's kind of like that age old question of how long does it take to get to the center of a Tootsie Pop? This year I've worked with two different sets of buyers that have used this type of loan due to the condition of the house they want to buy. This is a rehab loan. I'm gaining experience in this type of loan, and if another lender tells me they can close one in two months...I''ll beg to differ and write the contract for a long closing. My buyers came to me and wanted this type of loan. We went off of lender information for closing date. The lender dropped the ball. Contractor information was taken into consideration.
In both cases, the loans took forever. Buyers were frustrated because they were told things would happen sooner...not by me, but their respective lenders. Both times I used a different lender. I didn't recommend the lender in either case. The buyers came to me with pre approval letters. The first situation took over three months to close. The lender is the so called 203K loan expert in this area. In the second case...we are four months into this one, and the lender wants more time. This is a lender that assured me she could do this in two months. She also assured the buyers she could do this in two months. Both the buyers and myself are on the same page, and hoping this can be done. The property is bank owned, and we've been lucky to get two closing extensions from the bank seller. We won't be getting another extension if the lender can't perform.
When I got the last closing date extension, I told the lender not to use the whole month. She is going to take the next four weeks to close. I was on the phone with her today and she told me she would see what she could do to speed things along. My response wasn't pretty. I don't SEE...I ACT. Get on it and do what you have to do. An hour later I had things moving along again.
In the process of getting this lender to ACT...I called another lender I like working with. The information he gave me was very interesting. His company no longer does 203K loans, because there is so much involved in getting one closed. He told me they would have to have someone in the office designated just to do these types of loans, if they were going to be done right and in a timely manner.
That was a big learning moment for me. Not all lenders can do these types of loans, and not all lenders should be doing these types of loans. Agents in my market shy away from this type of financing and now I can see why.
I won't shy away from it, but I will go into it with a better understanding of what needs to be done to get the loan closed and the time it will take to get it closed.
I've lived on Colorado's Western Slope for over 22 years. I love this area and all it has to offer, and I enjoy sharing what I know about my home. As a REALTOR®, I also love to share my expertise in this area as well. If you need any real estate information for Montrose County, or Delta County, Colorado...please give me a call.
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