Tuesday, December 3, 2013

Can you close under 47 days?

How many days does it take to get a mortgage approved? More than it used to, that's for sure.
As mortgage rates dropped in September and October, and as mortgage lenders trimmed down staff, the time required to close on a purchase climbed by 4 calendar days. Data from mortgage software firm Ellie Mae shows that lenders needed 46 days, on average, to close an October purchase.
It's a noteworthy stats  for today's active home buyers. Mortgage rate locks of 46 days or more incur more costs than locks of 45 days or fewer.

Average Purchase Closing Time : 46 Days

In October, 5.12 million homes were sold on a seasonally-adjusted, annualized basis according to data from the National Association of REALTORS®.
The reading marks the sixth consecutive month during which home sales topped five million. Prior to October, this had not happened since Q2 2007. Furthermore, the sales occurring during a period of shrinking home inventory.
There were just 2.13 million homes for sale at the end of October nationwide, a supply which would require just 5.0 months to "sell out" at the current rate of sales. Buyers are competing hard for homes, with many requesting "quick closings" as a means to make a purchase offer stand-out.
"Quick closings", though, have no specific definition. You know a quick closing when you're in one. There is less time to get a mortgage approved; less time to scour the home inspection; and less time to prepare for your final settlement.
A quick closing may be one of 30 days or fewer; or one which is completed before the end of the year. However, buyers expecting to make a quick close should make sure their lender can accommodate first.
Ellie Mae reports that the time required to process, approve and fund a purchase loan climbed by three days to 46 days, on average, in October. This is the longest such period since summer and may be the result of falling mortgage rates plus large-scale industry layoffs.
Into 2014, purchase approval times may lengthen further. Mortgage rates remain low and additional industry contraction is expected.
Therefore, if you're about to buy a home and want to maximize your closing speed, follow these helpful behaviors. Your loan can be approved more quickly.

How To Get Your Purchase Approved More Quickly

For buyers wanting to close quickly, note that many loan factors will be beyond your control. For example, you cannot control how fast an appraisal is performed because the appraisal requires the cooperation of the seller; nor can you control how quickly a title search is performed by a title company.
However, there are steps you can take to make sure your loan gets approved as fast as humanly possible. Step one is to be prepared.

1. Know Your Paperwork Requirements

It's no secret. Mortgage lenders like paperwork. When you're buying a home, you'll want to be prepared with the most commonly-required verification documents. This can include W-2 statements and federal tax returns from the last 2 years; your two most recent paystubs; and your last two bank statements. You should also have a copy of your drivers license handy, as well as the social security numbers of everyone whose name will be listed on the mortgage.
Furthermore, if you know you have a unique credit situation such as a recent short sale or foreclosure; child support or alimony payments; or gift funds from a relative, have the relevant, related documentation ready.
This "gathering paperwork" step can be the most time-consuming one in the mortgage approval process. You know you're going to need the documents. Consider scanning them and having them ready in advance. This can save days off your approval time and help you reach your closing more quickly.

2. Don't Keep Secrets From Your Lender

Be honest and open with your lender -- even if you worry that what you share may harm your approval. There are two reasons for this.
The first reason to share is that withholding information from your mortgage application can constitute loan fraud, which is a far worse outcome than not getting mortgage approved. The second reason is that your mortgage lender will often uncover what you're electing not to share anyway.
As part of the mortgage approval process, a credit check is performed and various "occupancy tests" are conducted by an underwriter. Employers are contacted to verify job status and public records are sometimes checked as part of the approval.
With so many mortgage programs available for today's home buyers -- from large-downpayment to low-downpayment to no downpayment at all -- the more information you share with your lender, the more equipped he'll be to help you close quickly.

3. Use Pre-Approvals To Speed Closing Time

For a buyer, mortgage pre-approvals are among the most under-used tools to speed a purchase closing. Home buyers with pre-approvals in-hand at the time of offer can typically reduce closing times by one week or more. It's because of the role which a pre-approval plays to a lender.
Mortgage pre-approvals are "dry runs"; approvals based on an expected set of loan criteria which will eventually go to closing. During the pre-approval process, your lender will take a complete loan application which includes performing an income and asset verification, and he will account for specific loan traits which may affect your final approval such as your personal credit scores, any required child support payments, and the availability of a co-signer, as examples.
In fact, when a pre-approval is issued, the only missing item is often the physical property address of the home being purchase. To compensate, lenders use dummy information based on probable loan data including a sample purchase price, a sample real estate tax bill, and a sample homeowners insurance policy and/or homeowners association assessment, where applicable.
With their loan "pre-approved", buyers can move immediately from the "Writing The Contract Phase" to the "Underwriting The Loan Phase". This can save 7 days or more days from the approval process.

Save Time : Get Pre-Approved First

For buyers looking for a quick closing, it can be tough to buy a home in less than 30 days. However, plenty of buyers are doing it. The key is to be prepared and the first step in getting prepared is to get mortgage pre-approved.
Pre-approvals will help strengthen the offer you make a home, and they'll help your mortgage approval go through more quickly. So, get started with a pre-approval today and see how much home for which you'll qualify.
Rates and pre-approvals are available online with no cost or obligation.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.