January 29th, 2015
You’ve gotten pre-qualified. You’ve gotten pre-approved. Then you found your dream home, and your offer was accepted. And they want a short close.
The number one thing that you can do is to not take on any additional credit. Don’t buy a car. Don’t open up a new credit card. Any changes to your credit profile will catch the attention of the mortgage underwriters, and it will take time for them to investigate. Racking up new credit card debt or moving around money can derail your loan application, not just delay it. Lenders like stability.
This is also why you should have spent time building up your credit beforehand and ensuring that there are no mistakes.
Also, keep a copy of all your recent financial records. When a new statement or pay stub comes in, make a photocopy of it and put that in your file. Sometimes, the lender will need your most current statement, and the sooner you get it to them, the sooner they can get back to processing the loan. Be responsive, and you will help speed up your close.
The number two thing is to buy a house that meets the requirements of your loan. This is especially important if you’re looking to get a VA or FHA backed loan. If the inspections find that the home needs to be fixed, it will delay when the loan can be closed.
Your real estate agent can be especially helpful beforehand and help you avoid going under contract to a home that doesn’t meet the requirements.
Finally, find the right lender. The key is to find the right combination of experience, customer service and speed. Ask prospective lenders about their turnaround times on loan files. Are their underwriters in-house? What’s the average number of days from contract to close? And find out their experience in a variety of loans. You want to work with someone who stays up to date with current regulations and market conditions.
This depth of experience will create a smoother process and the possibility of a shorter close.
What would you do if you were in escrow and your car died?