Mortgage Time Line

From time to time it is worthwhile to take a look at the timeline that should be expected when undertaking a purchase or refinance. Typically I tell my clients to plan on 30 days from the day you complete the loan application, however in most cases we are able to close within 2 weeks. The time it takes to receive approval will depend largely on the amount of time necessary to gather documentation both prior to submitting a request to an underwriter as well as to meet any underwriting conditions. However, assuming a timely response on the part of the client, the following time line may be useful:

Day 1: Complete loan application, sign loan authorization and disclosure documents. Loan Officer completes initial authorization with automated underwriting engines.

Day 2: Deliver loan documentation to your loan officer. Loan Officer orders Appraisal and Title Report.

Day 3 – 5: Title Report and Appraisal are completed. Any remaining documents are delivered. Loan file is submitted to underwriting.

Day 6 – 8: Underwriter reviews application and loan file and requests any additional supporting documentation.

Day 9 – 11: Final Approval is received, closing documents are ordered and a closing is scheduled.

Day 12: Closing

Obviously this is a general guideline, but it does provide some idea of what to expect. In most cases, the most time consuming phase of the loan process is the gathering of documents. To save time I recommend that my clients us the loan application checklist and gather the necessary paperwork prior to application.

As always, if you have any questions or would like me to address a specific topic feel free to contact me at 801-256-0904 or by email at jayhart@cottonwoodmtg.com

How Soft is Real Estate in Utah

Well, in case you haven’t been paying attention, we are certainly experiencing a slowdown in the Real Estate Markets in Utah. Last week the Board of Realtors released information showing an average decline in value of 1.2% from the first quarter of last year to the first quarter of this year.

But just how bad is it?

I was reviewing the underwriting guidelines for one of the more aggressive lenders on the market today, and came across something that I thought was worth passing on.

This particular lender is notoriously difficult on appraisals. The vast majority of property appraisals will be reviewed and adjusted. In other words, this particular lender is suspicious of home values, and therefore more conservative in lending practices.

So, here is the thing I found: This lender has a list of every “at risk” county in the nation. Most States have several counties on this list. Utah, however, only has one county: Washington County.

What does that tell me? While we are slowing down, this is still a good time for Real Estate Activity in Utah. If one of the most difficult lenders views Utah markets as more stable than not, we ought to do the same.

Vacations and Open Houses

May brings two things to the Real Estate world: Vacations and Open Houses.

In the event that your agent and loan officer are not out of town, now is a great time to be visiting the many open houses in your area. Whether you are considering buying or selling, open houses can be a great way to see what is available, gauge your own interest, and set price points for your expectations and desires. Here are some things to keep in mind as you visit these houses:

1. Pay Attention to the Schools. Even if you are not in the phase of life where schools matter, it is worth considering the rating of the schools in the neighborhood you are considering. Quality schools will make resale easier in the future. Additionally, areas with higher rated schools tend to fare better in struggling markets.

2. Interest Rates are still low. I remember when people were excited to be offered 7.5% on a 30 year mortgage. Today we are below 6%. Eventually interest rates are going to climb. If you find a house that works well for you, it may be wise to make an offer rather than wait for better interest rates.

3. Timing the bottom is tough. As I have said before, it is extremely difficult to know when the market is at the bottom of a slide. Just because you think you may get a better bargain in 6 months doesn’t mean that interest rates will remain low. For that matter, who is to say that the homes you are most interested in will still be around?