How Long Does Clear To Close Take
Waiting on clear to close can be agonizing for a homebuyer, which is why we speed up this process as much as possible to get you to the closing table without delay. Our goal is to have you clear to close in as little as 10 days and the clock starts running as soon as we receive your loan application.
Bring The Necessary Identification To Closing
Most people need to bring two forms of valid identification to a closing. These documents need to be current. You can’t use an expired form of identification. Generally speaking, you will need a federal or state-issued photo identification document, such as a driver’s license, military ID or passport. For the second form of identification, many times your Social Security card or a credit card that shows your full name is enough. Witnesses need identification, too. We’ll send you a closing package that explains what you need to bring.
Preview Your Mortgage Credit Score
Nearly 1-in-4 consumers have an error on their credit report, and they can negatively affect your credit score.
Theres never a good time to find a credit report mistake, but finding one while you mortgage loans in underwriting is definitely a bad time to find one.
Check your mortgage credit scores prior to applying for a mortgage loan, if youre able. Your goal is to identify inaccuracies and to remove them before your loan is submitted into underwriting.
Plus, theres a secondary benefit.
When you know your credit score, it can be easier to shop for and identify the best mortgage loan for your needs. For example, if your credit score is between 580 and 620, you can be reasonably certain that an FHA-backed mortgage is in your future.
If your credit score exceeds 680, and you plan to make a 10 percent to 20 percent down payment, youll likely find to be your best fit.
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How To Avoid Closing Day Problems
Avoid unwanted delays or cancellations. Here’s how.
- Resource Centre
- What to Expect on Closing Day
Closing dayOpens a popup.is a milestone for any home buyer: You sign the papers, pay the funds and get your keys. Sounds easy. But closing the deal isn’t always simple. Closing day involves many people, so delays can happen. But, you can do your part to help it go as smoothly as possible.
Create A Timeline For Repairs The Seller Is Obligated To Make
It is not uncommon for a seller to be obligated to fix certain issues with the house before the new owner takes possession. However, it is important to put these repairs in the contract, along with a mandatory completion date. Otherwise, the seller could drag his feet with no contractual obligation to finish any repairs before he sees fit to do so.
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What To Expect On Closing Day
Once your loan is ready for closing, the actual closing typically takes one day if youre buying a home with cash. Federal law mandates a three-business-day closing process that begins when the lender issues a closing disclosure if youre taking out a mortgage.
The table below breaks out what happens with each type of closing:
|Closing on a house with cash||Closing on a house with a mortgage|
Make Sure That You Have Money For Closing Costs
Do you have the money needed for a down payment and to pay other closing and prepaid costs? If not, you wont be able to close your mortgage loan faster or at all until you find the funds to pay those costs and this could delay the closing on your home indefinitely. Before you arrange the mortgage, make sure you have enough cash on hand to pay closing costs.
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How Does A Closed Mortgage Work
Lets say Zane and Alex take out a $200,000 closed mortgage that needs to be paid back with monthly payments over a 5-year term, with 4% interest. If they decide they want to pay off more than the monthly payments agreed upon, theyll face a penalty. A closed mortgage will only allow you to pay 20% over and above your normal mortgage payment annually. Another potential issue with a closed mortgage is that you wont be able to use the equity invested in the home as collateral for extra financing.
What Are Todays Mortgage Rates
Great mortgage lenders will guide you through the home approval process and will help you to close on your loan more quickly. The above advice will help, too.
Get todays live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
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How A Digital Lending Platform Closes More Mortgage Loans With Three Key Features
Blends Digital Lending Platform enables financial institutions to drive more closed mortgage loans. The numbers speak for themselves. Loan teams using our mortgage software report an increase of up to 67% in year-over-year volume. Additionally, up to 89% of borrowers who start an application in Blend submit it. This article takes a closer look at a few features that improve the customer experience from the very start of the process while also creating efficiencies for lenders: a conversational application interface, automated data verification, and One-tap Pre-approval.
If Youre Cleared To Close Follow These Tips To Keep Your Closing Day On Track:
- Make all your payments on time. Missing payments can damage your credit score, and potentially impact your loan approval.
- Stick with your job. Do not change or leave a job prior to closing. Changes in employment history will raise a red flag for your lender and could lead to delays or cancellations in your closing.
- Wait on major purchases. Even if the local home improvement store is offering low-interest rates and high credit limits, resist the temptation to apply for financing. Even a small loan can derail the approval of your mortgage. Save the spending for after closing day.
- Do not open new bank accounts or close old accounts. If you must modify an existing account, contact your lender and ask for their advice.
If youre borrowing from a 401k or other investment account to pay closing costs or a down payment, be sure to talk with your lender ahead of time. Large deposits to your bank accounts could delay closing.
Purchasing a home is an exciting experience. If youre mindful of your spending habits, youre less likely to be denied after clear to close. Congratulations on your new home!
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How Long Does It Take To Close On A House If You Need A Mortgage
It takes between 48 and 53 days to close on a house if you need a mortgage backed by the Federal Housing Administration or U.S. Department of Veterans Affairs , or a conventional loan. According to ICE Mortgage Technologys August 2021 Origination Insight Report, it took:
- 48 days to close on a conventional loan
- 51 days to close on an FHA loan
- 53 days to close on a VA loan
However, a faster closing process is possible if:
You dont need an appraisal.You may be eligible for an appraisal waiver if youre making a large down payment on a conventional mortgage. Fannie Mae or Freddie Mac government-sponsored enterprises that fuel the mortgage market offer property inspection waivers or automated collateral evaluations if you qualify.
You have a strong financial profile. A credit score above 740, two years worth of stable employment, a salary and a large down payment may lead to a faster closing. Lenders may need management approval to approve a loan with complex self-employed income, credit history bumps or an unusual down payment source.
Youre buying a home with no title issues.If youre buying from a seller who has owned your home for two years or more and the home isnt in foreclosure, the title search shouldnt take long. However, if the home is part of a divorce settlement or the current owner is in mortgage default, this process may take longer.
Understanding Clear To Close
The clear to close is one of the last steps in the mortgage lending process.
When you first contact a lender, youll be pre-qualified based on a few basic questions. This process generally doesnt take more than a day or two, but its the first step in the lending process. Think of the pre-qualification as an estimate of what you can afford.
Next comes a pre-approval, a more detailed assessment of your financial position and liabilities. The pre-approval usually allows buyers to make an offer on a home. While many people tend to use the terms pre-qualified and pre-approved interchangeably, there are distinct differences between the two. If you have been pre-qualified, but not yet pre-approved, the sellers probably will not entertain your offer. The pre-approval process is integral to making an offer on a home. This process can take several days to weeks, so if youre considering buying a new home, its best to contact a lender and get the process started soon.
Clear to Close
Finally, once underwriting is complete and all relevant forms and conditions are completed, your loan is clear to close. Now, you can schedule your closing date.
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What Does A Mortgage Servicer Do
While a lender has the ability to originate mortgages and service loans, mortgage servicers only manage existing home loans and do not lend money. The primary role of a mortgage servicer is to process your mortgage over the life of the loan, collecting your monthly payments and properly distributing funds . Additionally, they also send an annual mortgage statement, breaking down how your payments were distributed over the course of the year. They can also assist with any financial crises or payment delinquencies you may face.
People Wont Buy What They Dont Understand
Rates, speed and personality are great ways to get a clients attention, but are not the only thing on which they will buy. If a potential borrower doesnt understand the value of your offering, the sale is a no-go, which makes client education a must. That can be easier said than done, however. We can recall a client whom we simply could not sell, and could not understand why, as we had a great product our potential client needed. The problem, we realized, was that the client couldnt read. Once someone from our sales team read the product details to him, the client signed, and stayed with us ever since.
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What Does Conditionally Approved Mean
A conditional loan approval means that the Underwriter has signed-off on the parameters of the loan and most of the documentation, but still needs a few more items before fully approving the borrower for the loan.
The Loan Coordinator contacts you to review the conditional approval mortgage and discuss any additional required items, as well as any ancillary documents that are needed to finalize the loan. This documentation can include:
- The completed appraisal
- Additional verifications
- Standard in-house items required for closing
Once all conditions have been obtained, the Loan Coordinator will send the file back to the underwriter for a final review and approval.
Next step: Once the loan is approved, a Mortgage Professional will schedule the closing.
The Bottom Line: Closing Day Preparation Pays Off
While the home closing process usually takes 30 45 days, you should be prepared to close as quickly as possible. Although some delays are unavoidable, you can do your part to ensure a seamless closing by fulfilling all unpaid debts, preparing all the required signing documents and depositing the down payment on time.
The bottom line is that choosing a lender you trust and one with whom you feel comfortable communicating frequently will be crucial to saving you time, money and stress.
Get approved to buy a home.
Rocket Mortgage® lets you get to house hunting sooner.
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Estimate Your Budget How Much Home Can You Afford
Its important to take certain steps before kicking off the mortgage loan process.
Most importantly, you should estimate how much house you can afford. This lets you set realistic expectations for house hunting and choosing a mortgage loan.
Instead of seeking your maximum home purchase price, start by determining your budget for a monthly mortgage payment.
Instead of seeking your maximum home purchase price, though, it may be better to determine the monthly payment you can reasonably manage.
Then, you can work backward using todays mortgage interest rates to determine your maximum home buying power.
Whats included in your mortgage payment
Current mortgage interest rates are an important part of the equation.
An interest rate change of just 1 percentage point, for example, could raise or lower your purchasing power by almost $40,000.
Similarly, real estate property taxes may be lower in a mature neighborhood as compared to one which is newly built. And, association dues for a condo can vary from building to building.
Homeowners insurance premiums may also be part of your monthly payment.
When you focus on a maximum monthly payment instead of a maximum home purchase price, you can be sure youve made a budget that accounts for all your ongoing housing costs not just mortgage principal and interest.
Youll also need to figure out how much you have in savings. This will inform how much you have for your down payment and closing costs.
Loan Is Submitted To Underwriting
The Underwriter begins the loan underwriting process, reviewing all documentation to determine whether you qualify for a mortgage.
While the Loan Officer and Mortgage Consultant will do their best to submit a complete file during loan underwriting, an Underwriter may still have questions and/or require additional documentation to satisfy any conditions for a final approval.
In addition to the loan file submitted by processing, the Underwriter examines:
- The completed appraisal
- Other ancillary documentation pertinent to the loan
If the loan is approved, the borrower receives a list of conditions required to be met before receiving final approval and notification of Clear to Close.
Next step: The Loan Coordinator provides you with underwriting’s preliminary decision on the loan.
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It Takes At Least 5 Touches
Realize it takes an average of five meetings with a business owner or home buyer to earn the sale. Many loan officers give up after two meetings and forget about the prospect. If a potential with their current LO or bank, play the long game and know that it may take years to bring a borrower over. However, in these cases, be quick to understand targets existing loan, line of credit maturity and refinance opportunities so you can reach out, chip away at the sale and stay top of mind. Important dates and borrower information can be saved into your CRM and follow-ups can be created and scheduled in advance so that youre working these long terms sales without lifting a finger.
S To Speed Up Your Mortgage Closing
When your mortgage loan is submitted for approval to a bank, there are roughly seven separate steps in the loan application process. What follows is a brief explanation of each step, and what you might be able to do to speed your loan along.
Note: For best results, the first three steps can and should be completed prior to shopping for a home.
Step 1: The initial mortgage application
When you give a mortgage application to your lender, its either completed inperson, by telephone, online, or via an app.
Completing a mortgage application, if youre prepared, will take 20 minutes to an hour.
Prepared means having:
- Your employment and address information for the most recent two years at the ready
- Your employers and landlords contact information handy
- Your bank statements along with retirement and investment account statements
- Proof of your income, which may be via pay stubs or tax returns, so the lender can determine your debttoincome ratio
In many cases, after taking your application, a lender will be able to offer a preliminary approval.
This means your loan is conditionallyapproved assuming you can support the information provided above with supporting paperwork and documentation.
Step 2: Provide supporting paperwork & documentation
After it issues your preliminary approval, your mortgage lender will ask you to provide paperwork to document the information youve shared as part of your application.
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Where Are Mortgage Rates Heading This Year
Mortgage rates sank through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they may not have been able to afford if rates were higher. In January 2021, rates briefly dropped to the lowest levels on record, but trended slightly higher through the rest of the year.
Looking ahead, experts believe interest rates will rise more in 2022, but also modestly. Factors that could influence rates include continued economic improvement and more gains in the labor market. The Federal Reserve has also begun tapering its purchase of mortgage-backed securities and raised the federal funds rate for the first time in March to combat rising inflation. The Fed has signaled six more hikes are likely this year.
While mortgage rates are likely to rise, experts say the increase wont happen overnight and it wont be a dramatic jump. Rates should stay near historically low levels through the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a favorable time to finance a new home or refinance a mortgage.
Factors that influence mortgage rates include: