In the years leading to the financial crisis, it was not nearly as impossible to get financing on your property through within a day or two. That, of course, came amid a vastly different economy and during an untamed era. In today's massively regulated, monstrously documented, down-to-the-last-decimal-point, tabulated process, you should count on your mortgage-closing timeline reaching or perhaps even exceeding three months - and that's depending on your lender and local banking rules. Here are 10 bits of advice, that we think could chop a month or even two off of that epic slog from finding your dream home to signing the closing papers. We even included how many days you'll save on your transaction by sticking to these:
1. Hire a multipurpose real estate agent
A capable agent will manage the complex escrow process actively and properly. Start with hiring someone whose ability to follow through has been proven. Just as you want to ask for referrals from those you know and trust for a doctor or dentist, the same is true of all involved in the process of purchasing and financing a home. There are a lot of opportunities for things to get off track. Having the best team on it is critical to a smooth process for you.
Time saved: A dedicated real-estate agent can slice days or weeks off a closing, experts say. But if your lender is backed up with other pending closings, even the best agent in town can't bump you to the head of the line.
2. View closing documents 24 hours before closing
By coordinating the closing schedule, you can set your expectations early and build in a bit of private time to spend alone with your loan papers.
Sign the upfront bank paperwork immediately and send in requested documents as quickly as possible. You also should ask your lender how long the entire process may take. The actual mortgage part of the closing could take less than 20 minutes. It's the other steps that stretch the calendar.
To help you navigate through all the bureaucracy and red tape, one document to view in advance is the HUD-1 settlement statement, which allows everyone involved in the deal to review all required costs and fees. You can scan that statement with your real-estate agent or your closing agent to ensure that nothing pops up at the last minute.
Time saved: A couple of hours, perhaps. Getting answers to your final questions can prevent unnecessary chatter and long-winded explanations during the closing itself.
3. Bring a certified check
You should not come to the closing carrying a check that you just ripped from your personal checkbook. In fact, be sure to ask your escrow company if it prefers that your payment come via a wire transfer or a cashier's check. Nowadays, the only way to go is a wire transfer from your bank to the closing agent. This minimizes the risk of any issues. And in some cases, this may be the only option available.
Time saved: As much as two weeks, or the number of days the escrow company takes to cash and then certify your funds.
4. Keep the appraisal process running smoothly
Appraisals are a crucial step in buying a home. The appraiser's determination of the value of the property dictates how much your bank will lend to you. You may be pre-approved for a $400,000 mortgage, but if the appraiser says the house is worth only $350,000, your bank is not going to hand over more.
To ensure the appraisal process is fast and efficient, work with the seller so that the appraiser can access the house in a timely fashion, and that means every nook. If an appraisal comes in lower than the sale price, you can always negotiate with the seller on repairs or updates that will add value.
If the appraiser is not accommodating, contact your lender. Whatever you do, be proactive about it. Most banks use appraisal-management companies, and these companies will have more than one option for appraisers.
Time saved: If you stall the appraiser, you could add several days or weeks to the closing process. An appraisal can take as long as two weeks, depending on the complexity of the property and the issues involved in determining its value. To keep that task at two weeks or less, you should ask your real-estate agent to give you a list of comparable properties that the appraiser may find useful.
5. Specify repair provisions in the contract
Time should be allotted for inspections that let buyers determine if they want to purchase the home as is. Buyers should specify the time frame for completing repairs after an inspection. You can also include provisions that allow for the seller to repair any issues that are determined within specified dollar limits -- say, a percentage of the sale price or (an) exact amount. This way, if an inspection determines that there may be unexpected repairs needed to the property, the buyer can either get it covered or choose to negotiate something different in the contract.
Time saved: Minimal, but inspections and negotiations over items to be fixed can add days or weeks to the closing process if they pop up late.
6. Hire a reputable escrow company
Escrow is essentially a trusted, third-party account through which money for the home purchase is received, held and disbursed.
Selection of an escrow company is the key, as is maintaining an open line of communication with your escrow contact. Experts suggest checking in at least twice a week in writing, to create a paper trail. Your calls can help move the process along. The fastest that you can get commitment might be half a day to a day. However, the typical time would be two to five days. But it depends on how busy people are at the company.
When you call, ask them how long is it currently taking to get things done? Sometimes, they'll make an exception depending on your needs (and being pleasant about it helps tons, too. They'll tell you they're backed up or that they're working really quickly right now. When in doubt, call two or three companies for estimates.
Time saved: About five days, if you find a solid escrow company that can handle your business.
7. Line up your insurance early
On the same day that your escrow is opened, you should buy a homeowners insurance policy, plus any other necessary coverage, such as a flood policy. Make sure your escrow officers get your insurance broker's phone number immediately.
The policy will not take effect until closing, so you are not paying for coverage just because you obtained the policy in advance. You might need to revise the policy if the coverage is deemed to be insufficient or if the documentation is not worded properly. A closing cannot be scheduled until coverage is confirmed.
Time saved: Five to seven days, if you don't wait to purchase the policy.
8. Build a pre-closing paperwork folder
Ask your mortgage broker to give you a list of all financial documents that you will need to collect for the closing. Begin pulling together that paperwork right away, checking off each record as you add it to your pre-closing folder.
The usual stack includes all pages of your bank statements and copies of all your pay stubs. Turn over every scrap of financial paperwork that you think reveals something about your monetary health. It all will turn up eventually anyway as the lender combs through your mortgage application.
It would be prudent to avoid trying to save paper. If a bank statement is numbered 1 to 24 pages, they'll probably need all 24 pages, even the one that says 'intentionally left blank.' If any item is missing, the entire file will have to go back into the loan's underwriter.
Time saved: Five business days, if you can avoid having your loan file returned to the underwriter.
9. Respond promptly to requests for more information
This often is the point in the process -- after you've seemingly answered every extraneous question and turned over every shred of your financial information -- where you may become the most frustrated.
Don't worry: The end should be near. Don't let your exasperation over any last-minute plea for more records stall your process. But, yes, that question typically means the closing will take longer.
Even if a missing item seems insignificant, it will require the file to go back into the queue for an underwriter to review. If the request is vague, speak to your loan officer to make sure you understand exactly what is being requested.
Time saved: It's up to you. In the past, clients wait two to three weeks to turn over those last-needed documents -- delaying the closing for that same amount of time.Generally, lenders don't typically assume you're going to take two weeks to get something back to them. They assume you're going to do it in a day or two.
10. Verify your past 2 years' employment history
Some mortgage experts contend that to get your mortgage to the closing table in the fastest way possible, you should supply five years' worth of work-history documentation. Huettner calls that overkill and says that two years' worth is adequate to get your loan approved in a timely way.
You should never embellish your work history or your wages. The lies will come out and simply lengthen the process -- or worse, cause the loan to be denied. If life events such as a divorce or a major illness have put a recent crimp in your savings, you should be ready to explain those.
Time saved: About a week, which is the time you'll lose if the underwriter sees that hole in your documentation and flags your file for later review.