How to ensure closing on time

Everyone plays a key role in making sure a transaction closes on time

Homebuyer:

Obtain a letter of pre-approval before you start looking for a home. Lock in your rate at least 10 days before closing. Changes in mortgage rates could impact your closing date. You will still need to get pre-qualified before closing. This is where your lender looks more closely at your financial situation than they did for a pre-approval.

The type of loan you are getting also affects your closing date. FHA typically takes 30 days, but conventional loans could take up to 45 days.

Realtor:

Let your clients know upfront how long it will take to close so they will not be surprised. Stay current on changes in the mortgage industry. New regulations that took effect July 31 require at 7 business days before a transaction can close. And you must allow 3 business days if a new TIL (Truth in lending) form has to be signed by the buyers. This can be avoided by locking in their interest rate.

Mortgage Broker:

Help homebuyers understand their options and make them aware of the pro's and con's of each. Unless the initial disclosure is handed to the client on the same day you took their application, application fees cannot be collected for 4 business days. If the interest rate changes more than .125%, a new TIL must be issued.

Title Company/settlement agent:

Make sure any third party fees are accurate. Provide a preliminary HUD Settlement statement to lender 10 days prior to closing. This will give lenders time to provide a new TIL to the buyers.

And the best way to insure a timely closing: Communication between all parties. Don't wait until the day you need something to let the other party know you need it.