How long should it take to close a renovation loan?
That is a great question. I guess it depends on who you talk to. There are allot of lenders out there that profess to do 203k loans and they likely can... BUT that doesn't mean they can close them fast does it? Nope, you all have been caught up in this at one time or another if you let the client run the show. I recommend that you do your homework and find out who can actually close these loans on a consistent basis.
I know some who can close in 21-30 days on a regular basis, that is the one you want working on your. But wait, there is more. The time doesn't start until you provide your client's loan package with the tax returns, and financial information they need to actually get started.
I was talking with Jeff the other day, a national lender who says they have closed a number in 21 days and 30 days hasn't been an issue. Tom says it is more like 30-35 days, and Donna closed her first standard 203k in 21 days but only works in two states.
The point is that allot of this is in your control as a Realtor or agent. When you start showing houses to a prospective client, YOU, yes YOU need to start that ball rolling and get the client to put together a financial package that will get this part of the process started early in the game. If you get a preapproval you are likely well on your way to achieving this starting point. Many of you do that already of course.
That means they need to find a lender up front. Just in case you find a fixer, you should do your homework and insure that the lender they do choose to work with is 203k fluent, and Fannie-Mae fluent in the HomeStyle Mortgage program too. It works much like the FHA 203k loan but can have no PMI for qualified borrowers.
You thought you were going to get some lender names, I know. There are so many good ones it would be unfair to name them here and miss half of them. If you need the name of a good lender in your area who can actually close these renovation loans in 30 days +- on a regular basis send an email inquiry. There can be issues that crop up making yours take a little longer but go with the averages.
I'm working on a project right now that the lender is pushing me to hurry up... there was a lot line change by the county, I didn't cause it but I have to address it. The well is now on someone else's property, two out buildings are no longer on the subject property but get their power from the property line, and the lot line now is only 2' from the home. This is not the normal or typical 203k and naturally will take a week or two to get worked out.