Closing On A House - How Long Does It Take

How Long Does It Take To Close On A House?

The length of time it takes to close escrow on a house can vary, but it typically takes around 30-45 days from the time the purchase agreement is signed to the time the sale is finalized. There are several steps that must be completed during this time, including:

  1. Conducting a home inspection: This is typically done within a week or two of the purchase agreement being signed.

  2. Obtaining financing: If the buyer needs a mortgage to purchase the home, this process can take a few weeks. Ideally, you should have your loan pre-approved before opening escrow. This will make the final finance process a lot smoother.

  3. Reviewing and resolving any issues: If any issues are uncovered during the home inspection, the buyer and seller may need to negotiate repairs or credits. This process can take a few days to a week or more, depending on the extent of the issues and the willingness of the parties to come to an agreement.

  4. Finalizing paperwork: This includes signing the final purchase agreement and any other documents required for the sale, such as a mortgage or deed. This process can take a few days.

  5. Closing escrow: This is the final step, where the title is transferred from the seller to the buyer and the sale is finalized. This typically takes place at a title company or escrow company, and can take a few hours.

Overall, the length of time it takes to close escrow on a house can depend on a number of factors, including the complexity of the sale, the responsiveness of the parties involved, and any issues that may arise during the process.


5 Reasons Your Mortgage Can Fall Through

5 Reasons Your Mortgage Can Fall Through

Your mortgage isn’t a ‘sure thing’ until you sign the closing papers. Until that point, anything can happen, which is why it’s so important to keep your financial and employment situation status quo.

If you’re thinking about buying a home or are in the middle of the process, here are five things that could make you lose your loan approval. 

Changing Jobs

When lenders approve you for a mortgage, they do so based on your employment and income. They assume your employment will remain the same, even though we all know that’s not always the case.

While changing jobs after you close on your loan isn’t a big deal, changing jobs mid-loan process could cause a delay in processing or even cause you to lose your loan approval. 

Hurting your Credit Score

Lenders pull your credit when you apply for a mortgage and again before you close. If your score changes drastically during that time (for the worse), you could lose your loan approval. Once pre-approved, try keeping your credit the same by not opening new accounts, missing payments, or racking up too much credit card debt.

Making Large Purchases

After you apply for (and are approved) for a loan, hold off on any large purchases until after you close your loan. Making large purchases, especially on credit, can cause you to lose your loan approval.

Here’s why.

If you bought on credit, you either opened a new credit account or increased the debt on an existing account. This can hurt your credit score and increase your debt-to-income ratio, which can hurt your chances of approval.

Making Large Deposits or Withdrawals in your Bank Account

Large deposits or withdrawals in your bank account are red flags to lenders. A large withdrawal means you spent money and might have more debt or less money to put down on the home than you were approved for.

Large deposits could signify that you borrowed money from someone or took out a loan. A new loan (even if from friends or family) is a debt that affects your debt-to-income ratio. Therefore, if you increase your DTI, you could lose your loan approval.

Not Providing Requested Documentation

Even if you’re pre-approved for a mortgage, underwriters always need more information. If they ask for documentation you can’t or don’t provide, they won’t be able to clear your loan conditions. This could cause them to decline your loan.

Final Thoughts

Mortgage approval isn’t official until you close on your loan. In the meantime, it’s crucial to keep your information as stable as possible. If you can help it, make sure your credit score doesn’t change, your bank account stays the same, and you don’t change jobs or income.

With everything status quo, you have a better chance of qualifying for and closing your loan. If you have questions about what might affect your loan or are ready to look at homes, contact me today.


What Should You Ask Lenders When Buying a Home?

What Should you Ask Lenders When Buying a Home?

Buying a home requires more than finding the perfect home. First, you need financing, or you won’t be able to buy the home.

Lenders have specific requirements when considering buying a home, so knowing what questions you should ask them is important.

How Much do I Need for a Down Payment?

Your down payment depends on the loan program you choose. For example, VA loans don’t require a down payment, but FHA loans require 3.5% down. Conventional loans require 5% down in most cases, and if you put down less than 20%, you’ll pay Private Mortgage Insurance.

Discuss your down payment options and how much you should put down to get the best rate and terms on your loan.

What’s the Best Interest Rate I can Get?

Interest rates are much higher this year than last, so you should talk to your lender about how you can lower your rates.

They’ll look at your qualifying factors and tell you what you can improve to ensure you get a lower rate. You can also ask about the possibility of buying the rate down (paying points) to lower the interest rate to keep it even lower.

When Should I Lock my Interest Rate?

You must lock your interest rate before closing on the loan, but your loan officer can tell you the best time to do it. Most rate locks are free for 30 days, but if you must lock it for longer, it might cost you.

It’s best to lock your rate after you sign a purchase contract, so you have a better chance of closing on the loan before it expires, but always ask your lender when it’s the best time to lock.

How Much are Closing Costs?

You’ll need more than the down payment to close on your loan. You’ll also pay closing costs. Most lenders charge 3% – 5% of the loan amount in closing costs. Ask your lender what the total cost of the loan is so you can budget accordingly.

Some loans allow you to wrap some closing costs into it if you don’t have the funds upfront. If you’re worried about affording the closing costs, talk to your lender about your options.

Final Thoughts

Knowing what to ask lenders before you buy a home is important. Mortgage financing is one of the most important aspects of buying a home. Without a mortgage, you’d need cash to buy a home, and most people don’t have enough cash for a purchase of that size.

It’s a good idea to get quotes from at least three lenders and to get to know their process. No two lenders offer the same rates and terms or have the same process. You might find one lender has an easier process and better rates than another, which can mean the difference of thousands of dollars!


Is the Shifting Market Bad for Buyers?

Is the Shifting Market Bad for Buyers?

For quite a while, we were in a seller’s market. All sellers had the upper hand; most sold their homes for more than they listed.

Fast forward to today and that’s no longer the case.

Home inventories have fallen and interest rates have skyrocketed. So is this good news or bad news for buyers?

For now, it’s good for buyers – here’s why.

Less Demand

First and foremost, there’s much less demand. This time last year you couldn’t wait for more than a day or two to see a home once it was listed or it was under contract. Not only that, but it was under contract for much more than it was listed for and buyers were waiving appraisal contingencies.

Today, that’s not the case. There are not as many buyers in the market because of higher interest rates, so buyers have much more opportunity to look at more homes and bid what they want on a home, not what other buyers are pushing them to bid.

Reasonable Sellers

The selling craze of last year made sellers go crazy. They weren’t accepting offers even a penny below their asking price, and most were holding out for the highest bid above their asking price.

It makes sense why they’d do it, but it’s not fair to buyers who invest in these homes, spending more than the house may be worth in a few months.

Today’s market has much more reasonable sellers willing to negotiate prices and allow you to pay a fair price for the home. You also don’t have to feel pressured to waive the appraisal contingency.

Tougher Affordability 

There is one aspect of the shifting market that can be a challenge for buyers: mortgage rates. They’re at the highest in decades, with recent rates hitting over 6%. This could price many buyers out of the market.

The good news is you can shop around to get the most competitive rates, and you may even control your rate by perfecting your qualifying factors.

Before you apply for a loan, check your credit score and fix any issues you find. Stabilize your income and make sure you have a decent down payment. Don’t show up with the bare minimum requirements. Instead, show lenders you are a good risk and are serious about buying a home in today’s market.

Final Thoughts

The market is shifting, but that’s not always a bad thing. Buyers couldn’t continue paying overinflated prices for homes and not expect the bubble to burst eventually.

With things settling down, prices will decrease and buyers will have more options. Sellers may wait longer for their homes to sell, but everything won’t feel like such a frenzy. Instead, it will feel like a more relaxed process where everyone can get what they want from the real estate transaction.

If you’re ready to look at homes on the market today, contact me today, and let me help you find the perfect home.


How Long Does It Take to Close on a Home?

How Long Does It Take to Close on a Home? 

Buying a house is exciting and overwhelming all at the same time. Not only must you find your dream home, but you must secure financing too unless you’re paying cash. 

The financing part causes a lot of stress for most people because they don’t know what to expect. One of the largest concerns I hear about is how long does it take to close on a home? 

How Fast can you Close?

When you sign a purchase contract, it’s natural to want to close right away. But it takes time. While it varies by lender, the national average is 48 days. With higher interest rates and a slow in the industry overall, you might see faster turnaround times, though. 

The Loan Closing Process

You might wonder what takes so long to close on a home. It helps to understand the steps lenders go through.

  1. You get pre-approved before you look at homes. This allows the lender to review your credit score, income, assets, and liabilities. They use this information to make sure you qualify for any of their loan programs.
  2. You work with a reputable real estate agent to find your dream home and sign a purchase contract. Once signed, you give the lender the contract along with any other conditions you can satisfy according to your pre-approval letter.
  3. You open escrow. This is where you put money down in ‘good faith.’ This tells sellers you’re a serious and qualified buyer and are willing to risk your funds. A neutral third-party escrow company holds the funds until you close.
  4. The lender orders an appraisal and title work on the property. This information tells the lender if the home is a good risk. Is it worth at least as much as you’re paying? Is the title clear? In other words, is the chain of ownership legal and are there any outstanding liens aside from the seller’s current mortgage? This process could take a couple of weeks.
  5. Clear any outstanding conditions. At this point, to get to a clear to close, you must provide any straggling documentation the lender needs. Sometimes other issues come up when they review your paystubs, verify your employment, or look at your asset statements. Stay in touch with your loan officer and provide documentation as quickly as possible.
  6. Close on your loan. Once you have the ‘clear to close,’ you’re free to close on the loan and take ownership of the home.  

Final Thoughts

It’s always worth asking a lender what their turnaround time is, especially in today’s market. Some lenders are moving much faster than others. If you have a closing date that’s sooner than 30 – 45 days, make sure you find a lender that can work within that timeline.

Some of how fast you close a loan depends on how well you cooperate with the lender. The faster you provide the documentation they require, the faster they can clear your loan to close. 

If you have questions about the buying process or would like a great lender referal, give me a call today!


PMI – What is it and How Does it Work?

PMI – What is it and How Does it Work? 

By now you’ve likely heard complaints or frustrations over PMI (Private Mortgage Insurance) and do whatever you can to avoid it.

What if it’s not as bad as you think, though?

Private Mortgage Insurance has its positive sides, including the fact that it allows you to get competitive financing without a 20% down payment.

Here’s everything you need to know about PMI. 

What is PMI?

Private Mortgage Insurance is insurance coverage you buy for the lender. It’s the lender’s guarantee for allowing you to put down as little as 3% – 5% on a home.

Typically, lenders require a 20% down payment for conventional financing, but many borrowers don’t have that much to put down. With PMI, you can make a much lower down payment, but cover the cost of insurance to protect the lender if you default. 

How Does PMI Work?

PMI is insurance for the lender only, but you pay the premiums. It’s your cost because you aren’t making a large down payment.

Lenders take a chance when borrowers don’t have a lot of their own money invested in the home. It would be a lot easier for you to walk away from a home if you have 3% invested versus 20%, right?

You pay the PMI premiums, but the insurance is only used if you default on the loan. In other words, if you get so far behind that the lender starts foreclosure proceedings, they’d make a claim on the insurance.

The Good News about PMI 

Here’s the good news.

PMI doesn’t last forever.

You only have to pay the premiums until you owe less than 80% of the home’s value. This can happen in a couple of ways.

  • Make your regular payments and wait until you pay as much as necessary to get your principal balance below 80% of the original home value.
  • Make regular payments but pay for a new appraisal when you know homes in your area appreciated. This may allow you to cancel PMI early.
  • You can also make larger mortgage payments than is required to pay the principal down faster.

You can request to cancel PMI whenever you get the balance lower than 80% of the home’s value, but lenders use the original value unless you pay for a new appraisal.

As long as you have a timely payment history and there aren’t any other issues with your account, they may approve your request to cancel it.

If not, by law lenders must cancel PMI automatically when you owe 78% of the home’s original value. 

Final Thoughts

PMI doesn’t add a lot to your mortgage payment, and it makes it a lot easier to buy a home without a large down payment.

If you have good credit and a low debt-to-income ratio, you might qualify for conventional financing with PMI. You’ll pay the insurance temporarily while you enjoy your new dream home.

If you need help finding the perfect home or understanding how PMI would affect your payment, contact me today!


The Best Mortgage Loans for First Time Homebuyers

The Best Mortgage Loans for First Time Homebuyers

Buying your first home can be exciting and overwhelming at the same time. You’re fulfilling the American dream but at the same time, taking on the largest debt of your lifetime. 

Fortunately, there are many great mortgage loans for first time homebuyers. Here are our top choices.

FHA Loans

FHA loans used to be known as a ‘first time homebuyer’s loan.’ While today anyone can use the program, it is a great program for anyone that hasn’t owned a home before because of its flexible guidelines and low down payment requirements.

FHA loans require mortgage insurance for the life of the loan at a rate of 0.85% of the loan amount. Your insurance payment decreases each year as you pay your balance down, but you pay it for the life of the loan.

How to Qualify

  • Minimum 580 credit score
  • Maximum 43% – 50% debt-to-income ratio
  • At least 3.5% of the purchase price as a down payment
  • Stable income and employment for the last 2 years
  • No recent bankruptcies
  • Proof you’ll occupy the property as your primary residence

Conventional Loans

Conventional loans are reserved for borrowers with good credit, but it doesn’t have to be perfect. We’ve seen borrowers get approved with a credit score of 660 which isn’t in the ‘good credit’ range.

Conventional loans are different from FHA loans because you can cancel your Private Mortgage Insurance once you owe less than 80% of the home’s value. This means your mortgage payment will decrease once you eliminate PMI.

How to Qualify

  • Minimum 660 credit score
  • Maximum 36% – 43% debt-to-income ratio
  • At least 3% down payment (5% if you owned a home before)
  • Stable income and employment for the last 2 years
  • No recent bankruptcies

VA Loans

VA loans are for veterans that served or are serving our country. This flexible mortgage program doesn’t require a down payment and has the most flexible guidelines for veterans.

The program is only for owner-occupied properties and is a great option for veterans right out of the military looking to buy their first house.

How to Qualify

  • Minimum 620 credit score (this varies by lender since the VA doesn’t have a minimum credit score requirement)
  • Maximum 43% – 50% debt-to-income ratio
  • No down payment required
  • Adequate disposable income according to your location and family size according to VA guidelines
  • Stable income and employment or proof of future employment if you just got out of the military
  • Proof you’ll occupy the property as your primary residence
  • Certificate of Eligibility to prove you are eligible for a VA loan

Final Thoughts

If you’re a first time homebuyer, you have many mortgage options available to you. Compare your options and get quotes from at least 3 lenders. Each lender has different requirements and charges different rates and fees.

I’m happy to help you figure out which loan is right for you as well as help you find the house that’s perfect for your needs. Together we’ll make your dream of homeownership come true.


Do Real Estate Agents Lie About Other Offers

Do Real Estate Agents Lie about Other Offers?

In the competitive real estate industry today, it’s common to wonder if real estate agents lie about other offers. It may sometimes feel surreal when you hear ‘there’s a lot of interest’ in every house you look at – so are real estate agents telling the truth or stretching it to interest you?

Why Real Estate Agents Won’t Lie

Real estate agents have a lot to lose if they’re caught lying. Here are the most common reasons they won’t lie

The Moral Code of Real Estate Agents

First, know that real estate agents have an ethical code they should follow. Is it super regulated? Probably not as much as it should be since it’s hard to follow up on every real estate agent in the country.

But, reputable real estate agents won’t lie. They abide by their required ethical conduct and want what’s best for their clients.

Real Estate is all about Reputation

If a real estate agent is known as a liar in the industry or even one person calls their bluff, it could ruin their reputation. Real estate agents rely on word-of-mouth. They don’t want people telling others in the area bad things about them.

Lying just to get more offers isn’t an ethical move and anyone who’s found out doing it will likely ruin their reputation.

How to Spot a Lie

However, there are plenty of agents that will lie, but luckily there are ways to find out.

  • Read through the lingo – If a sales agent tells you there’s a lot of interest in a home or he/she has many offers, ask for more information. If they don’t say we have an offer for $x or we already have an offer for the listing price, they are bluffing just to get you to act fast.
  • Ask questions – You are allowed to ask the agent questions about the offer, like ‘when did you receive it?’ or ‘does it have contingencies?’ Ask as many questions as you want about it to see if he/she is lying.
  • Give a lowball offer – If you don’t think there are other offers and you want the house, make a lowball offer, but one you think the seller will accept. If there aren’t any other offers, the seller may work with you or even counter offer. If there are offers, yours will be declined and you can move on.

Final Thoughts

The key to finding out if a real estate agent is lying about other offers is to work with a reputable real estate agent yourself. As the buyer, you need someone on your side that has your back.

Sure there are unscrupulous real estate agents out there that will lie just to get a home sold or to try to increase commissions. Don’t fall for it. Having a reputable agent on your side means you have a professional who can see through the lies.

If you’re ready to buy a home and want a reputable agent with you, contact me today!


How To Prepare To Buy Your First Home

How to Prepare to Buy Your First Home

First Time Homebuyer Tips

Buying your first home is exciting and overwhelming all at once. Before you get in over your head, use these simple tips to best prepare you for one of the largest investments you’ll make in your lifetime.

Save for a Down Payment

The earlier you can save for a down payment the better. While you don’t need 20% down to buy a home, the more money you invest, the easier it is to get financing. Plus, you’ll keep your mortgage payment down which not only helps you qualify for a loan but helps keep your payment affordable for the next 15 to 30 years.

Check your Credit

Your credit score is one of the most important factors in your application. It’s what lenders look at first and if it’s not high enough, they won’t approve your loan.

Everyone gets free access to their credit report weekly at Check all three credit reports and see what you need to fix. Look for:

  • Late payments
  • Credit utilization over 30% of your credit limit
  • Collections
  • Errors

Fix any issues you can and maximize your credit score. If you want to see your actual score, check with your credit card companies or bank – they may offer free access to your score too.

Get Pre-Approved (not Pre-Qualified)

Before you shop for a home, get pre-approved. Even if you think you have ‘great’ credit and good income, find out what a lender thinks first. We recommend getting quotes from at least 3 lenders so you can compare your options side-by-side.

You may find you get approved for more or less than you thought you could afford. A pre-approval letter also helps get your foot in the door with sellers. Many sellers won’t show their homes or entertain offers from buyers without a pre-approval.

Stick to your Budget

It’s tempting to go ‘slightly’ over your budget especially when you see it only makes a difference of a few dollars in your mortgage payment, but it’s a bad idea. Don’t get caught up in a bidding war or get so emotionally attached to a home that you outbid yourself. Stick to your budget and know that the right home will come along.

Exhaust all First Time Homebuyer Assistance Programs

As a first time homebuyer, you have many options for assistance. Talk with your lender and me to find out what programs are available to you. From low and no down payment loan programs to down payment grants, there are programs for borrowers of all walks of life.

Bottom Line

First time homebuyers have plenty of opportunities to secure a home. Even if you don’t have a 20% down payment or perfect credit, there are options available for you. The key is to maximize your qualifying factors as early as possible so you increase your chances of securing your dream home.

I’m always available for questions or help – together we can help you prepare for and buy your first home, making it a stress-free and fun process!


How To Calculate Your Debt To Income Ratio

How to Calculate your Debt-to-Income Ratio

If you’re in the market to buy a house, your mortgage lender will look at a couple of main factors to determine if you qualify. Most people know they check your credit score and credit history, but they aren’t aware of the debt-to-income ratio and how it works.

What is a Debt-to-Income Ratio?

Your DTI is a comparison of your monthly debts to your gross monthly income (income before taxes). The higher the percentage is, the higher your risk of default becomes. Lenders like borrowers with a DTI of 43% or less. This leaves plenty of money for living expenses and savings, reducing the risk of default.

What’s Included in your Debt-to-Income Ratio?

The only information you need to calculate your DTI is your total debts and total income.

Debts to Include in your DTI

The debts you include are those on your credit report. A few examples include:

  • Car payments
  • Minimum credit card payments
  • Personal loan payments
  • Student loans

The DTI also includes the new mortgage you’re applying for which includes the principal, interest, real estate taxes, and homeowner’s insurance. It also includes any HOA dues and mortgage insurance, if applicable.

Income to Include in your DTI

You can include any income the lender will use for qualifying purposes. Obviously, this includes your full-time income. But if you have any other sources of income that have a two-year history and will continue for the foreseeable future, you may include them too.

Common examples include alimony or child support you receive or side gigs you run with income you can prove.

Calculating your DTI

With these two totals, you can calculate your own debt-to-income ratio using this calculation:

Total debts/Total income = Debt-to-income ratio

Here’s an example.

Jan makes $7,000 a month before taxes. Her debts include the following:

  • Minimum credit card payments $150
  • Car payment $300
  • Student loan payment $250
  • New mortgage payment $1,750

Jan’s debt-to-income ratio is:

$2,450/$7,000 = 35%

How to Lower your Debt-to-Income Ratio

If your debt-to-income ratio is higher than a lender might like, here are a few ways to lower it:

  • Pay your credit cards down or off – If you have credit card debt, try to pay it off. If you can’t, at least pay them down so your minimum payment drops, and you lower your DTI.
  • Pay down other debts – If you have other consumer debts you can pay down to have less than 6 payments, lenders may exclude them from your DTI
  • Increase your income – If your income is too low, take on a part-time job or start a side gig. You’ll need to show receipt of income for a while, so the sooner you start it the better.

Final Thoughts

Your debt-to-income ratio is just as important as your credit score. Take the time to figure out your DTI and where you stand before thinking about buying a house. You can prepare both your credit score and debt ratio early on to increase your chances of loan approval.