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Good lenders try to make the mortgage process more of a sprint than a marathon. They also try to impart on prospective homebuyers how much power they have in moving that finish line.
You can generally go from contract to loan closing in 30 to 45 days, depending on the loan type, the property and a handful of other important considerations. Some purchases, especially distressed properties like a foreclosure, can stretch the timeline considerably further.
Consumers itching to speed up the mortgage process need both preparation and patience. To a degree, you’re at the mercy of appraisers, home inspectors and underwriters. But there are some things you can do to help best position your loan file for maximum haste. Here’s a look at five big ones.
1. Conquer Your Credit
Having good credit is beneficial for so many reasons. Obviously, you’ll need to meet a lender’s credit benchmark in order to even qualify for financing. Beyond that, you’re more apt to get competitive rate and term offers with higher credit scores.
But a clean credit report can also help you move faster through the application and underwriting process. Late payments, bankruptcies and other financial hiccups can set off alarm bells.
Loan applications with blatant blemishes may trigger additional scrutiny, which often means requests for additional documentation from you. That back-and-forth process can eat into the calendar.
Knowing your credit standing can help prepare you for the mortgage approval process. To keep on top of that, it’s important to pull your credit reports and credit scores. Credit.com also offers a free tool that allows you to check your score and get a summary of your credit profile on a monthly basis.
2. Find the Right Lender
Not all mortgages are created equal, especially more specialized products like government-backed VA and USDA home loans. But thousands of lenders and loan officers have plenty of experience with all loan types.
The challenge 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?
Consider a company’s expertise if you’re seeking a VA loan, an FHA 203k loan or any other more specialized mortgage. There are no guarantees, but sometimes that experience can translate into a speedier and more streamlined process.
3. Be Responsive
You’ll be asked to supply information and documentation throughout the loan process. Pull together your tax returns, bank statements, employment documents and other information before you even seek loan prequalification. Having all of that information on hand at the outset can help loan officers fill gaps sooner.
Pivot as quickly as possible if additional questions arise during the underwriting stage. You can’t complain about delays and a more drawn-out process when the loan officer is waiting on you to provide information.
4. Buy a House That Meets Requirements
Government-backed programs like FHA and VA loans have property standards and requirements that need to be met. Homes that present problems may need corrective action before the loan can close, which can lead to delays.
This is where a good real estate agent can make a world of difference. The last thing you want to do is get under contract on a home that has little chance of a successful appraisal. That can waste both time and money.
5. Don’t Take On New Credit
Don’t apply for new credit or make any large purchases during the loan process. Any changes to your financial and credit profile will raise eyebrows among underwriters. Lenders crave stability and reliability.
Racking up new credit card debt or moving around money can utterly derail your loan application, not just delay it.
There’s no blueprint or surefire way to speed through mortgage lending. There are documents, dollars and cold, hard calculations, but this is also a business of human beings.
Explain to the people who help you through the process that you’re buying on a tight deadline. Communicate constantly, and take responsibility (and quick action) when the ball’s in your court.