According to the most recent Ellie Mae Originations Insight report, closing time for both purchase and refinance loans has been the shortest since February 2015. It declined from February’s 46 days to March’s new record of 43 days.
Indeed, it is taking lesser time for homes to stay in the market. This is attributed to the continued scarcity in available housing inventory. Still, statistics does not speak for the individual. If you fail in one area of your loan acquisition, there is a big possibility that your approval will delay, and even cost you more in the long run.
So as a homebuyer, what actions can you take to ensure rapid mortgage closing?
This is especially helpful in today’s market where there is a lot of competition. If you are vying for a home with a rival, having a pre-approval shows the seller that you are serious with your intention to buy. It also reflects the sincerity of the lender to provide you with the needed financing. This is an advantage if the property you are interested in has multiple buyers.
Enlist the help of a professional
A real estate agent or a realtor can guide you through the mortgage process based on their experience and insider knowledge of the dynamics of the real estate market. Choose someone with the proven track record, someone who will speak on your behalf and who takes time to understand your needs. You may find a realtor online, via your local real estate agencies, or through the recommendation of friends and family.
Get your papers ready
One of the most common reasons for delays in mortgage closing is the unavailability of the necessary documents. Expect your lender to ask for your bank statements, tax returns, current paystubs, W2 statements, and other documents showing proof of alternative sources of income. Forward them on time to make sure it will not cause postponement of your approval.
Check for title liens
These liens which may come in the form of claims from unpaid contractors, for example, will cause a delay on closing if not settled on time. Contact your seller to make sure the title is cleared. This will also prompt them to settle them promptly should there be any.
Don’t make big financial decisions
Uncharacteristic deposits or big withdrawals can be a red credit flag to your lenders. This may cause them to doubt your creditability as these could signify an instability. This instability is then seen as a threat to the health of your future finances. The same thing goes with sudden job changes. As much as possible, lay low and keep your credit fit and steady.
Get everything ready for signing day
Your identification documents will be required so make sure you have them on the day of signing. Some of the funds that need to be paid upfront should be paid on closing. Consult your lender or your realtor to know everything you need to bring to the table.
Follow these tips and you will have a good shot at beating the deadline.