How Quickly Can We Get to Settlement?

March 16th, 2015

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Everyone wants to close loans quicker these days. And I mean everyone. But when it comes time to do their part to move quickly people are not as excited to help out. The problem is that most of the other parties to the loan don’t realize that they are party to the loan. What I mean is that the loan does not occur in a vacuum. We as the lender are not the only party to the process. We need help from the listing agent to let the appraiser into the property quickly. The title company needs to send us the title work as soon as possible. However, most of moving quickly will come from the buyers. I would guess 3 out of 10 buyers that claim to want to settle very quickly end up settling past contractual deadlines. This is because they did not perform quickly enough.

How did it used to work?

Prior to the current hyper competitive sellers’ market loans used to customarily close in 45 to 60 days. I remember when I first got in the mortgage business in 1986 loans could take months and months to close! People waited that long and it all worked out. To suggest a 60-day closing these days will get you laughed out of any open house or most real estate negotiations.

Today’s reality

We can close loans quicker as long as buyers and other parties participate on the level we do. Buyers have to operate at the speed we do. Buyers need to realize that it can become a part-time job to provide all the paperwork necessary for a mortgage application. There are no excuses when it comes time for a buyer to take action on different items that we may need throughout the course of the loan process.

Related article: Don’t Worry, We Have Plenty of Time, It Can Wait.

If a buyer can perform, and other parties can perform, then we can too. So it really depends on how quickly you think you need to go. It also depends on your travel schedule, if any. Lastly, it depends on your current situation at work and home. I once had someone who wanted to settle very quickly but they were getting ready to get involved in a major work project. There was no way they were going to be available on the level that we would have needed them to be.

Estimated timelines

The last time I went through a transaction where someone wanted to move quickly, I told the buyer and the realtors that a fairly quick course of action is the following:

14 days for appraisal contingency release
21 days for financing contingency release
30 days for settlement

That is fairly easy to execute if everyone participates as needed, but it is still a quick course of action. If you want to move faster we can if everyone agrees to move faster along with us. You can possibly do:

12 days for appraisal contingency release
17 days for financing contingency release
25 days for settlement

If you need to go faster than that, maybe we can. But we would really need to talk more about everyone’s level of commitment and ability to more quickly. And mortgage borrowers should be sending in all necessary documentation in advance of a sales contract.

But a buyer should not be afraid to push back on the timeline and ask for more time if needed. I find that many times a seller and listing agent are pushing to go faster for no specific reason, other than just to do it. I understand that in a competitive marketplace being the winning bidder on a property may be because you were able to close quicker and deliver the seller their money quicker. But there are real world constraints that we all operate within. Sometimes we should not promise to deliver the sellers their money faster just because it is their whim. No one should have to close loans quicker just to meet an arbitrary demand. We all have to take a very hard and realistic look at the time we have available to perform and execute to deliver on promised turn times.

The bottom line is to help the mortgage lender help you.

To contact me to discuss your timelines, mortgage rates, or other mortgage questions, click here to schedule a call or you can email me directly.

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Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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