Homebuyers

Buying a Home in a Hurry? Follow These 6 Tips for a Faster Closing

Homebuying can be equal parts exciting and stressful. On one hand, you’re about to become a homeowner. On the other, you have to deal with paperwork, home inspection reports, and waiting that comes with the homebuying process.

The good news is that there are a few things you can do to speed up how fast you can close on a home. 

“The work done ahead of schedule before you write an offer is key,” said real estate broker Jeff Lichtenstein of Echo Fine Properties in Palm Beach Gardens, Fla. “Working with a lender who understands the local market helps get through some of the nuances of different homeowner associations and local rules.” 

How long does closing on a home take?

 Closing on a home can take between a week and a few months, but the timeline is typically between 30 and 45 days.

Homebuyers need to provide documentation to their lenders and go through loan underwriting, order inspections, and have the home appraised, among other things.  

Being prepared ahead of time and having your documentation ready can move the process along faster.  

1. Gather the necessary documents for your mortgage

When you apply for a mortgage loan, you’ll need a provide documentation to prove who you are, your income, and information on your debts.

Typically, you need bank statements, two years of tax returns, debt statements, and identification.

Additional documents may be requested if you’re self-employed or a W-2 employee of an organization. 

Self-employed applicants will need bank statements or 1099 forms as proof of income and business tax returns. Those who are employed will need W-2s. 

Your lender should explain the requirements to ensure you’ve gathered everything you need.

2. Get preapproved (not prequalified) for a mortgage

When you begin your home search, getting prequalified for a mortgage from a lender gives you a general idea of if you may be able to secure a home loan and how much you may be eligible to borrow.

But this process is less rigorous than getting preapproved for a loan and generally won’t speed up the closing. 

The preapproval process, however, requires a more detailed review of your financials and typically a credit check. This gives you a more realistic idea of the mortgage you may be able to secure.

If you’re preapproved before your offer on a home is accepted, it can speed up the underwriting process and ultimately the closing timeline. That’s because the lender will already have much of the documentation they need to officially approve the loan. 

3. Schedule home inspections and appraisals quickly

Once your offer on a home has been accepted, you will want to get the appraisal and inspection done as quickly as possible if you’re hoping for a swift close. Waiting on either of these can delay the homebuying process. 

Typically, your lender will schedule the appraisal and you will be responsible for setting up the inspection. Buyers are typically billed for both.

Lenders need to see the appraisal to make sure they’re not lending you more than the home is worth. And a home inspection protects the buyers, so they know of any issues with the property before the sale.  

4. Do a title search on the home early

After you sign the purchase agreement on a property, make sure the title search is done as early as possible.

If there are any liens (debts) on the property or ownership disputes, resolving them can slow down closing. The earlier you do this, the better.

5. Don’t do anything to hurt your credit score

The thing that surprises homebuyers is the things they shouldn’t do that could alter their credit score and slow down the closing.

To prevent any changes to your credit score, avoid making any large purchases, pay your bills on time, and don’t open up any new lines of credit.

“Make sure you’re paying your bills,” said Lichtenstein. “Avoid anything big like purchasing a car. Run away from anything where your credit will be pulled, and don’t lose your job or switch jobs until after the closing.”

6. Consider making a cash offer on a home

One of the fastest ways to close on a home is to pay for the property in cash if you can afford to do so. This way you don’t have to go through the loan approval process.

“Cash is king and will always have an advantage over mortgages,” said Lichtenstein. 

Most homebuyers don’t have that kind of money available. However, some lenders can help by allowing homebuyers to make a cash offer and expedite closing.

Essentially, the lender puts up the cash to purchase the home. You pay rent on the property until your mortgage closes and then you buy back the home from the lender.