How long is taking for your mortgage loan to close? Did you go with a bank or a company that had the lowest rate? Maybe the mortgage lender you're with is someone your mom or dad recommended. And now it's been 90 days or more and your mortgage still isn't closed. That's not the case at some places. For instance, at AmeriFirst Home Mortgage our closing times are much lower according to the numbers. Let's take a look at a specific loan type: renovation mortgages.
First, what is a renovation mortgage? This type of loan helps home buyers purchase a house and finance repairs, remodeling or renovations directly into the mortgage. This differs from a traditional home equity loan because renovation mortgages are not second mortgages. Instead it's one home loan, which includes the work right in the loan amount.
The main renovation mortgages are: Full 203k, 203k Streamline and HomePath Renovation. Each of these mortgage loan options has different parts to it, and each has its own requirements. However all of them have one thing in common: most lenders have a tough time dealing with them. If the lender handles one of these loans at all, it typically takes a long time to close. You see, the loan must close before the work begins, so that's a long time to wait to move into your home. And that's if the lender even handles one of these loans. Many will pre-qualify you for a standard FHA loan, but turn you or the house down if it needs work because they don't deal with the FHA 203k.
So, keeping in mind that these loan options take more work and more time to close, let's look at the numbers at AmeriFirst. The figure below (click on it to enlarge it) shows tge median number of days between taking the loan application and getting the loan clear-to-close. You can see that most months are right around 50 days, with some months - March for instance - that are much lower. Bottom line: AmeriFirst is closing "difficult" renovation mortgages in 49 days on average.
What does all this mean?
To the average home buyer, waiting more than 2 months to get a mortgage closed is annoying, frustrating and may even be a hardship. Think about giving your landlord notice that you're moving out in 2 months, only to have the lender say, "Wait, wait. It will be another 30-to-60 days until we can close." So a lender who can close a complicated renovation mortgage in less time than others can close standard loans is working above and beyond.
If a lender can close a tough loan like a HomePath Renovation in under 60 days, imagine what that lender can do with an easier loan like a standard FHA loan or a conventional mortgage loan. Loans closed quicker means people get into homes without having to wait and juggle an apartment and payments with the mortgage process.
Agile and smart - that's how AmeriFirst Home Mortgage does business when it comes to mortgage loans. Renovation mortgages are just one part of the portfolio of business here at AmeriFirst. We're also well-versed in USDA rural development loans, first time home buyer loans and second-home mortgages for that perfect lake cottage. And as you can see, you won't be wringing your hands over long turn-times for closing your loan. Let us know how we can help.