I don’t drive fast but I have a need for speed – I love closing home loans as quickly as possible.
If you have a similar need for speed, watch this video for how we can get it done at break-neck speed.
Transcript:
No doubt about it, time is of the essence. As a loan officer, one of the most common questions I get is: how quickly can you get my home loan done? Understanding what I’m about to share here will make you a stronger buyer by allowing you to make more aggressive offers with a shortened escrow period.
How quickly a mortgage gets closed really depends on three factors, and as you’ll see, you have a lot to do with it:
- The first factor is how well prepared are we before you go into escrow?
You should feel pretty close and connected with your loan officer before you go into escrow. We should have spoken at least a couple of times, I should have all your necessary documents, and I should understand the particulars of your financial situation. By the time you get your offer accepted, I will have explained the whole escrow process to you, answered tons of questions, and I’ve provided you pre-approval letters for properties that you made offers on. We’re practically real estate BFFs at this point. If all of this is true, then I am ready to submit your loan ie. get it started, just as soon as escrow is opened. That’s really important because one of the most important things we need to get done quickly is the appraisal, but I can’t order the appraisal (in most cases) until you have e-signed the first set of loan disclosures. I can’t send you those disclosures until I’ve provided the application and submission documents to the lender. I’ll already have your application like 95% completed before you even go into escrow, and I will get most of the submission docs during the pre-approval process (although sometimes, I’ll need to ask you for updated bank statements or paystubs). The only other documents I need in order to submit the loan are the purchase contract and the fee sheet from title and escrow, known as the Settlement Statement, which I get from the escrow officer. So it’s important for me to know as soon as you’re in escrow so I can get the escrow officer’s contact information and then request the contract and Settlement Statement. So be super prepared before opening up escrow and then make sure to stay connected and let your loan officer know immediately when you’re in escrow so we can start tracking down everything needed to get the loan going.
2. This takes me to the second factor in how long it takes to get your home loan done: How responsive are you and the other parties in this transaction?
How quickly does the escrow officer send me those documents that I need for submission? How quickly do you get back to me with an additional document I need – like your new homeowner’s insurance policy. How quickly does the appraiser get us the report? Some of these, we can’t control, but I can ,and will, stay on top of everyone to make sure that your loan remains among their highest priorities. The only one of these that you can really control is yourself. Please understand that I can’t get your loan done without you. I will need you to send me information and documents, and the faster you’re able to get those to me, the faster we can get this loan closed. If I could give someone advice, that’s about to go into escrow, it would be to let the people in your life know that you will be going into escrow soon and then prioritizing escrow over the things that normally get your immediate attention. Maybe you can’t do this with your kids, but pretty much everyone else should get notice that they’ll be on the back burner for a couple of weeks. It’s not necessarily that I will need a ton of stuff from you, it’s that I need information or documents at a particular time, sometimes in a particular order, and we’ll need them ASAP so we can get to the next thing and then next thing until we reach the finish line. For example, at least three days before you sign loan documents, you will need to sign the second set of disclosures. That three day wait period is by law for most loans, so there’s no getting around that. But in order for me to get you those disclosures, the lender needs a bunch of stuff, including your new homeowner’s insurance policy. If you’re lagging on selecting a policy, then I can’t generate the disclosures. The three days are pushed for as long as it takes you to sign the disclosures. Also, the disclosure is usually something that people have questions about. It’s like the first set of disclosures, but with more finalized numbers, as numbers have firmed up throughout the process. My goal, way back in the pre-approval process is to help you understand the fees that you’ll see on the disclosures so that seeing them during escrow doesn’t throw you for a loop, confuse or overwhelm you, and therefore slow us down.So again, the second factor is responsiveness of the parties, and so I recommend that you be as responsive to your loan officer as you can be. I would not ask something of you that I would not do, so I take a lot of pride in being responsive, at appropriate times of course, but sometimes that will mean nights and weekends, depending on the situation, and a good loan officer will do that if that’s what it takes to get your loan closed quickly.
3. And that takes me to the third and final factor for how soon your home loan will be done, and that is the lender.
So first, I know this is a little confusing because a loan officer and broker are referred to as lenders and the banks that we actually get the loan from, are also called lenders. We’re all lenders. In this context, I’m using lender as in the bank that we’re getting the loan from. A loan officer, or a broker, connects you with the right lender for you and your situation and then we get the bank all the documents and info they need to give you the loan. So anyway, the lender is the third biggest factor in getting your home loan closed fast. As of now there are human beings that are reviewing documents and so depending on the bank, they can have slow, fast, or medium turnaround times. There are some lenders that are known for their speed. There are some lenders that are known for their great rates. Sometimes those are not the same banks and so you have to decide what’s most important to you. In some situations, I’ll actually apply at two lenders for the same loan because I want the one with the best rate but I’m up against the clock because there’s a short escrow period. This is one of the good questions to ask when you’re rate shopping, and I don’t think that enough people ask this question – everyone is so concerned about getting the best rate, as they should, but then they forget to ask how long it will take to get a loan for that rate. Hopefully they tell you the truth, I worked for a large, national lender who knowingly told people that they closed loans faster than they actually did – I didn’t work there for long – but what’s important about this is that you can risk the property you’re in escrow for or your deposit, when the lender can’t get the loan done within the escrow period you’ve agreed to with the seller. Usually I can tell you upfront, how long a lender will take. A fast lender can be 2-3 weeks and slower ones are a month or two. Sometimes there’s variation in how long a loan will take to close, not just based on the lender, but based on the loan program you’re applying for. While we’re still in the pre-approval process, I’ll let you know how long the loan should take to secure, depending on the lender and program we’re planning to use.
So there you have it, my three factors and tips for getting your home loan closed as soon as humanly possible.
If you’re planning on buying a property in California, you’re welcome to schedule a pre-approval call with me, link to my calendar is in the description, and I’ll catch you soon.
