Fast Close Mortgage
The typical mortgage takes 30 to 45 days to close under normal conditions. However, it is possible to get a fast close mortgage and close your mortgage in as little as two weeks.
You may be in a rush to close on a mortgage and fear your deal will be gone if you go through the traditional mortgage application and approval process. Maybe the lease on your rental is about to end and you have to close fast on a purchase so you have a place to move into.
There are many reasons why you may need a fast close mortgage and we will take you though some of your options and how you can help speed up the process. Meanwhile, we have some lenders who can help to do their part in closing your loan quickly.
4 Steps to Close on a Mortgage Fast
What many borrowers fail to understand is they play a major role in how fast a lender can close your loan. The process starts with the borrower, then shifts to the lender and some of the third parties who also play a role. There are normal delays which occur at each step which is how and why it typically takes at least 30 days to close on a mortgage.
Follow these steps to help speed up the process and shorten the time it takes to close your mortgage
1. Collect the Required Documents in Advance
Every lender will require you to provide the documents listed below before your loan package can be submitted to underwriting. Therefore, you can help speed up the process if you are prepared to e-mail or electronically upload these documents to your lender immediately. Waiting to start collecting these documents or sending them via mail will delay the process
- Last 2 year’s tax returns (all pages)
- Last 2 year’s W2’s
- Last 2 months bank statements (all pages)
- Last full month’s pay stubs
- Copy of your driver’s license or alternative ID
- Copy of your social security card
- Copy of the sales contract for purchase
2. Provide Additional Required Information via E-mail
This is some additional information that your lender will need. Provide this to them now to avoid delays.
- Contact info at employer for lender to call to verify your employment
- Contact info for your realtor
- Contact info for your attorney if you are using one
- Copy of signed gift letter if you are receiving gift funds for the down payment
3. Schedule Appraisals and Inspections Quickly
Virtually every mortgage will require an appraisal and most home buyers will also pay for an inspection to determine if any major repairs are needed. Delays in closing on your mortgage can occur if the companies performing these tasks are unable to appraise and inspect the home and return their reports quickly.
Delays can also occur if the seller do not make the home available on a day that is most convenient for the companies to come in and inspect.
We recommend scheduling these even before you are approved for the mortgage. You can always cancel if you do not receive an approval but at least you get on the calendar. It also puts pressure on your lender to get you that conditional approval.
4. Be Responsive to Underwriting Conditions
Your lender will likely provide you with a conditional approval where some additional documents or other information may be needed. Your mortgage cannot be scheduled to close until these conditions have been cleared.
Once you receive the list of conditions, drop everything and begin working on the things that you control. If they need another bank statement or more pay stubs then provide them immediately. You may be frustrated with, or question what the underwriting department is asking for, but you should be focused on complying rather than arguing if you want your mortgage to close quickly.
Fast Close Mortgages
There are certain type of mortgages where there will likely be fewer delays and have the potential to close much faster. FHA loans for example have more layers of bureaucracy and will likely take longer to close. However, if a small down payment is what you need, then an FHA loan may be your only option.
- Conventional Mortgages – There is no reason why you cannot close a conventional loan in less than 30 days if you execute the plan flawlessly. There are no special government forms or inspections that are required so this is more about providing the information needed up front, and then getting the loan through underwriting. Learn more about conventional mortgages.
- Hard Money Loans – If you are buying an investment property, a hard money loan is the way to go if you must close quickly. It is possible to close a hard money loan in as little as 10 days. Do not lose out on an investment opportunity ever again. Read our article about hard money loans.
- FHA Streamline Refinances – With an FHA streamline refinance, you can close much faster because there is less documentation needed and there is no need for an appraisal. See if you qualify for an FHA streamline refinance.
Lenders who Offer Fast Close Mortgages
If you are interviewing lenders, ask them to specifically outline how they will get your mortgage to the finish line fast. We often hear about false promises and receive phone calls from borrowers who are looking to switch lenders due to delays with the company they are currently working with.
Mortgage Brokers have the ability to choose which lender they can put your mortgage through. They will have some history and experience in working with these lenders and will know which one is likely able to close your loan soonest. Meanwhile, it may be possible that the broker’s processing team could slow things down if they are not doing their best to speed your application through.
Direct lenders have the ability to control their underwriting team and in special circumstances move your application along faster if needed. However, large banks may be so large (similar to the government) that it could actually take longer to close your mortgage.
Online lenders like Quicken could close your mortgage fast but like everything else it really depends upon who you work with and it may not be any faster than working with a broker.
What Can You do to Help Close a Mortgage Fast?
If you would like to close your mortgage quickly, then you have to take ownership of this process. If you rely solely on your loan officer, then you are likely not going to get this done quickly. Remember your loan officer likely has may customers he or she is working with and they do not truly manage the third parties who can cause delay. This is where you need to control your own destiny.
- Application and documentation – The moment you get a link to complete an online application, you should do it immediately. Do not leave anything out and also provide every document the lender is asking for. They cannot start the process until you have done your part completely.
- Work with your realtor – Your realtor can help get appraisals and inspections scheduled especially when the seller is not responding to appointment requests. Realtors often love to get in the middle of the mortgage process and want “updates”. Have your realtor focus on what he or she can do to help by making the property available for appraisals and inspections.
- Manage your attorney – The attorney can cause delays if not managed carefully. There are many closings waiting on the attorney to do their part. Too often the title work is ordered by the attorney so if you are confident the loan will be approved, then have your attorney do that work immediately.
- Offer to pay a premium – Some of the third parties involved may have a full schedule. We hear about appraisers with a multi week delay especially during times when interest rates are low and refinances are occurring. Consider offering to pay a premium for the appraisal, inspection and title work if the servicing company promises to put you on the top of their list and perform within 24 hours.
In short, although you may be searching for lenders who offer the ability to close a mortgage fast, so much of it still rests on your shoulders. You should prepare by collecting the necessary documents now and then work closely with your lender and third parties to shorten the time it takes to close your mortgage.
Mortgage Broker, Small Lender or Large Bank? – This article discusses the various lender options and the difference between them.
Conventional Mortgages – See what conventional loans are all about and what to expect when applying for a mortgage
How Long Does it Take to Close on a House? – This resource will discuss how long it typically takes to close on a home.