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How to Close on Your New House, Quickly

If you’ve already gone through the lengthy process of writing offers, securing financing, and arranging inspections for your potential property, you’re probably ready to be done with the entire process. The average closing time for a house is 60 days after signing a purchase contract. However, it’s possible to speed up this process and move into your home a lot faster.

Why You May Want to Close Fast on Your Home

The waiting period between accepting an offer and officially closing on a house can seem like it never ends, and that’s not without reason. Closing on a house involves a lot of moving parts from a lot of different people. By getting ahead and making sure there is no unnecessary delay, you can speed up the process for everyone involved.

Are There Risks to Closing Early on Your Home?

Rushing through any process can cause a lot of stress, especially when it comes to closing on a home. There’s a lot of paperwork involved with the closing process, and it’s very important that all of it is done thoroughly with due diligence.

Most lenders will require borrowers to obtain title insurance to make sure that the legal ownership of the property is clear and definitive and that there are no legal disputes on the property. Scheduling a home inspection is also a typical lender requirement to identify any underlying issues. These items are required by most lenders before they can move forward with your loan application and any delay will only slow down your loan approval process.

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What Causes Delays When Closing on a House?

A lot happens during the closing process, but whether it gets done or not depends on the communication between different parties. Here are some of the issues that often arise and ultimately slow down the process.

Buyer financing

It will take your lender a while to gather the official details of your loan. The lender is responsible for underwriting your loan and researching every important aspect of your financial history, including your income statements, debt-to-income (DTI) ratio, your tax returns, and your credit score.

Changes to your credit

If you’ve recently opened a line of credit, things can become confusing for your lender. Opening a new line of credit can drop your credit score, which requires your lender to conduct additional research and check facts. If your financial situation changes significantly prior to closing but after you receive a pre-approval letter, the lender may have to reassess your loan options, which will push your official closing date even further back.

If you get pre-approved, most lenders recommend not making any large changes to your financial situation. It’s not the right time to open a new credit card, make a large purchase, or take out another loan.

Keeping your finances the same ensures that you know how much you can afford to put down on a house. Plus, the processing time for the loan will be a lot faster and more efficient.

Low appraisal

During closing, your lender will often schedule an appraisal. If the appraiser finds that the value of the home is much lower than what you are offering, your lender will have to go back and reassess if there is another loan option for you or if you would like to go forward with the amount already approved and supplement the difference with your own money. However, the low appraisal might be due to issues or defects in the home you weren’t aware of, which may change your decision about whether or not you want to move forward altogether.

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Tips for Closing Quickly on a Home

Although the closing process depends on a lot of different parties coming together, there are still things that you, the purchaser, can do to help expedite the process. Here are some of our tips for closing quickly on a home.

Get pre-approved to speed up closing time

Like we mentioned, it takes time for lenders to process all of your financial information along with the records on the property you’d like to buy. Getting pre-approved before you begin looking for a property is very helpful to lenders because it provides them with an overall look at your financial history. From there, they can estimate the loan amount that you are eligible to receive.

Know your required paperwork

When you go to buy a house, you will have to provide a lot of paperwork to a lot of different people. To prepare for this process, request copies of your information or print records yourself.

This includes your bank statements, credit history, credit score, income verification, social security number, past addresses, paystubs, tax returns, and information regarding other loans taken out in your name.

Schedule the inspection as soon as possible

A home inspection is one of the most important parts of the closing process. During an inspection, a licensed professional will go through the property and walk around the outside of the home to provide you with an official report of the home’s current condition.

The report will include details regarding any damages, necessary repairs, and the state of features such as the structural integrity, gas, water lines, and HVAC systems.

If the inspector discovers that certain areas of the home need repair, you might want to go back to the seller and ask for a comparable deduction off the selling price or you can consider an agreement to allow the seller to make the repair as a condition to be completed in order to close. This will help you ensure that you are paying what the home is worth.

However, seeking a lower price will further add to the timeline and draw out the closing process. Scheduling an inspection within the first few days of the closing process will ensure that you’re made aware of concerns and necessary repairs as soon as possible.

Closing Quickly on a New Home

By being proactive about the parts of the closing that you can control, you can expedite the process and hopefully move into your home faster than originally planned. However, it’s important not to rush past important details like the financial information required by your lender or proper home inspections.

It’s all about being prepared by having documentation on hand. A pre-approval will help everything move more smoothly, ensuring that you can close in a reasonable amount of time and start living in your new home as soon as possible.

 

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All material is presented for informational and educational purposes only and should not be construed as individual financial, investment, or legal advice or instruction. ZeroMortgage does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by ZeroMortgage. ZeroMortgage, its affiliates, and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. ZeroMortgage does not provide tax advice. Please contact your tax adviser for any tax related questions.

This page last updated: May 10, 2022