How to Speed Up the Mortgage Closing Process | VIP Loans

Purchasing a house can seem to take a lot of time, especially waiting for the sale to close after offers have been accepted. To help accelerate things up, here are some tips to eliminate possible delays, as well as enable the process to go as fast as possible.

Choose experienced real estate agents

Helping things go smoothly as possible starts at the beginning of the property shopping process. A competent and experienced agent or professional will help homeowners find the house most suited to their needs and budget and will also be a very important ally during the escrow process. 

A reputable and excellent real estate agent or broker will not only be able to help people through the closing process, but they will also be able to alert their clients to possibly bumps in the road and advise them as to the paperwork their clients will need and other requirements in advance, so they will be ready to meet those requirements as they come up. Less effective agents or brokers might only alert people to these needs as they arise. It means wasted time as buyers hurry to address these things.

Get preapproved

Before individuals get seriously into house shopping, they should choose a financial institution and get preapproved. It is a step beyond prequalified and short of actual loan approval, in which lending firms look at their finances and credits, as well as provide them with estimates of how much the borrower can get. 

Basically, it is everything individuals need to get approved for a housing loan short of determining whether the property they choose will support the debenture. Preapprovals do two things for borrowers. First, it shows possible buyers that they are serious about buying the property. 

Second, it allows lending firms to get their info and do much of the work when it comes to assembling the debenture package in advance, so all that is needed is the appraisal, as well as other evaluations of the house for the debenture to get approved.

Have the documents lined up

The lending firm and real estate broker or agent will be able to tell their clients what documents they will need to get approved for the housing loan and for the sale of the property to be completed. It will include paperwork of the income, like the client’s W-2 form and tax returns from the past twenty-four months. 

Their tax returns will usually be required if they are self-employed or own their own business, and profit-and-loss statements may also be needed in the near future. Lending firms will also want to see the borrower’s current bank statements, as well as documents of investments and other financial assets. If the borrower is divorced, they may be asked if they are receiving or paying child support. 

They will also be asked to document these things as well, regardless of their marital status. If they sold some properties or investments to get funds for the down payment and put the money in their checking account, lending firms will want to see the paper trail to make sure they are not borrowing funds as well. The key here is to be upfront when it comes to finances. 

If certain aspects of the borrower’s income or finances that they are uncertain about or that they think could possibly affect their debenture application, they need to ask if it will be needed. If they omit anything important, there is a good chance that borrowers will find out about it anyway, and their application will be delayed while lending firms will go back to them for the right information.

Borrowers need to respond to info requests immediately

Regardless of how hard people try to get their ducks all in a row in advance, it is likely that a couple of things will fall through the cracks. If these things happen, borrowers need to try to get details – info about their business earnings, documents of the source of their DP money, and supporting paperwork used to resolve billing or credit dispute a couple of years ago – to the lending firm as quickly as possible. It is an example of why it is an excellent idea to keep their tax and financial records organized.

Speeding Up the Close: Five Tips on How to Close Your Mortgage Loan Faster  So You Can Start Moving In

People should be proactive when it comes to meeting requirements

Borrowers should not wait for their lending firm or real estate broker to tell them to do something they know they’ll need to do. They can start lining up homeowner’s insurance as soon as they put in the offer – individuals will not have to pay a single cent until closing, which will give them a chance to evaluate multiple insurers to see which has the best available deal for them. 

Borrowers can check out qualified property inspectors so they can call as soon as their bid is accepted – it is an excellent idea to find their own, instead of one that is suggested by their real estate broker, given the possible conflict of interest. Also, borrowers need to make sure they have enough funds for the down payment. 

It should be properly lined up and readily available. If individuals need to sell some investments to raise the fund, they need to make sure to do it well before the closing so there is time for the purchase transaction to take place and for the lending firm to verify the source of income.

Beware of problem properties

Some property buyers will find what they think is the right or perfect house, the right home price, and is an amazing community, but are surprised to learn their lending firm will not approve the housing loan because of problems with the house. 

It may be because of issues with the structure itself, like an outstanding lien or other problems found during title searches, but they can also be substantial issues with the structure itself. For instance, unique homes that are distinctly different from their community can be an issue because they are hard to appraise. 

Think of original farmhouses tucked away in lands that are now converted to subdivisions – there is nothing to base comparable sales on. Or maybe a house that have tons of nice improvements but results in overbuilt for the neighborhood. 

There is a good chance that brokers will have a hard time selling it sooner or later. Or custom-built houses in unusual styles that fit buyers’ sense of whimsy but may not be for other people. Lending firms are reluctant to approve, or refinansiering av lån (refinancing of loans) for properties that may need significant maintenance and repairs or that could be pretty hard to sell in cases of foreclosures. 

They are more comfortable backing debentures on well-maintained houses that fit in with the rest of the community. That is not to say that people cannot get a housing loan on unique properties, but they may need to go to local and small lending firms and allow longer for approval.

Limit seller concessions

A common thing when it comes to negotiating a property sale is to request a seller concession, in terms of things sellers agree to do to close the deal. These usually involve requiring sellers to make certain improvements or repairs to sweeten the deal before it is closed. 

Obviously, it presents the possibility of delays if these things are not met in a timely manner. If the borrower is looking to close the deal quickly, they may be better off looking for financial concessions instead of asking sellers to have the repairs or improvements done themselves.

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