There are two ways to look at how you close your home loan. When you are taking out a home loan to buy a home, the term closing means the initial setting up the loan with your bank, as part of the escrow process. Indeed you can close your home loan faster by taking precautions before approaching the bank. Having done your homework always helps.
For example, have you received pre-approval from your lender? Do you know how much you want to spend and whether you have the funds to pay back a mortgage at today’s interest rates? If you do your homework and got pre-qualified in advance, the approach to the bank will be a lot more successful. When finding a suitable home, the figures that you need to take into account are important.
Get House Price And Details
If you have knocked the house price down enough to accommodate for any repairs and can show the bank the specific property details, you may close your home loan faster than using hypothetical figures. The reason for this is that the bank has some solid foundation upon which to base their judgment.
If you leave it to the bank to tell you how much you can spend without having a specific house in mind, you lose time and may be offered less. The fact is that banks work on the premise that you earn a set amount and that you have a set amount of debt to pay. They are not overly generous when it comes to lending above your existing debt level.
However, if you have a solid house price and can show them your security for taking out that loan in bricks and mortar, you have a better chance of getting a quicker decision.
Work Out What You Will Save On Existing Loans
Closing a new home loan to pay off existing mortgages turns out to be difficult for some. However, if you can prove to the bank that your equity in the home is sufficient to cover the amount you need to borrow, you can close your home loan more quickly. An accurate market analysis from your realtor is helpful here, at first.
However, to close the new loan the lender will order a certified appraisal of your home before agreeing to anything. This will be based on today’s market and sufficient information on what is left on your home loan. A competent market analysis will prevent any nasty surprises or delays when the appraisal comes in.
Have All Documentation And Calculations With You When Applying
It is important than there are no delays caused because you forgot to take papers with you to the bank. When you have completed tip one and two above, take all your documentation to the bank to back up your application, as this saves a tremendous amount of time. It’s easy to close your home loan if the bank is satisfied that you meet all of their criteria and your loan presents little risk. One solution is to have a folder or case in which all of the papers are put, when you initially gathered them together.