7 Ways to Get from Contract to Closing Faster
Beginning October 3rd, they’ll be a new sheriff in town and his name is TRID. Who is TRID and why do you need to know his role? The Truth-in-Lending Act and the Real Estate Settlement and Procedures Act are being integrated into new loan disclosures and updated timing requirements so borrowers will be better prepared for mortgage loan closing by having three business days to look at the final closing costs on their real estate transaction.
This transparency is awesome for the housing market.
But in an industry where timing is everything, loan execution (the amount of time it takes from loan application to loan funding) is being compressed. The TILA/RESPA Integration rule is making realtors, lenders, and closing agents work more cooperatively to ensure you get to close on your new home by contract closing date. Here are 7 things buyers, sellers, realtors, lenders, and closing agents can do to support an effortless transition into this new landscape.
- Buyers: Get your financial house in order. Having organized and current financial records scanned into PDF format is a critical necessity in today’s digital world.
- Sellers: Have a home inspection completed before you list your property for sale and repair the nuances that will delay a buyer from closing on their loan.
- Realtors: Be sure to maintain solid connections with at least four different mortgage professionals representing the different mortgage origination options. You’ll need one of each from: a major bank, a community bank, a nonbank lender, and a mortgage broker. Not all loan programs are built the same and buyers rely on you for recommendations to lenders who can work with their particular situation.
- Closing agents: Get your lien searches done early on and issue title commitments as quickly as possible. Don’t ruin your reputation by holding off until a lender’s loan commitment is issued. Invest in your business and avoid critical delays.
- Have a 360-degree view of your transaction on a weekly basis to include the buyer, realtor, lender, and closing agent to ensure everyone is on task and to address any potential issues as they arise. I would venture to say that most everyone has some sort of smartphone or tablet they touch over 25 times in a day. Manage expectations by using the Tasks, Notes, and Events features to track interactions at every point in loan execution. Maintain the target dates and never let a deal lose momentum.
- Before writing a condominium purchase offer that is subject to VA or FHA financing, be sure to check if the condominium project is eligible for VA or FHA financing.
- Buying a property in an area that is governed by a homeowner’s association? Be sure to review the financial soundness of the association as this will impact which loan programs your eligible to receive and may impact the long-term appreciation of your investment. Have the association complete the HOA Project Questionnaire as soon as possible and deliver it along with the requested project financial documentation to the lender.
Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.
Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors