The first homework assignment for every homebuyer/borrower

Frequently quoted housing reporter Kenneth Harney recently wrote a great article that every new homebuyer should read, and backs up the first thing I tell every serious homebuyer, get a full pre-approval for a loan BEFORE you start looking for a home.

First off, if you submit a pre-approval with your offer, it is will make that offer stronger.  In many instances, the seller will require one to be submitted with the offer.

Harney points out that people in contract for the homebuyer tax credit are under the gun to get that final loan approval and get to docs and funding.  He strongly suggest that the intial paperwork be submitted to get the approval process going. 

I’ll take it a step further, with a fully updated pre-approval, all that needs to be done is to lock your loan rate, order the appraisal (which takes longer to get done with the new HVCC rule), and wait for the underwriter to give final approval.  The cleaner the file, the faster the approval will arrive and that will allow the lender to order your loan docs for signing, funding and recording.

It is very important for borrowers/buyers to realize that lenders have “turn times” for every step of the loan process. Example, 2-3 days for approval (locked, purchase loans have priority), 1-2 days to print docs, allow 1-2 days for notary and return, 2-3 days to review docs for funding, 1-2 days to set up and fund.  You also must allow 5-7 days to complete an appraisal since they now have to be ordered by third parties.  These turn times are just examples.  Lenders can get slammed quickly, and turn times can increase on dime.

Please read Harney’s bullet points in this article.  They are very, very good!  Getting educated can prevent a lot of stress cocktails.