Mortgages & Real Estate

How long does it usually take to close a loan after I finish the appraisal?

The startups are on the rise

In modern times, an increasing number of people do not want to work under authority. Encouraged by the very favorable conditions for entrepreneurs in the corporate market today, a large chunk of the population has started dreaming of starting their businesses. People are becoming more and more aware of their capabilities, and hence, are concluding that they have the potential to start their own little business. Instead of working for somebody else, these go-getters want to create their legacy. As a result, new startups are popping up right and left every new day.

Reselling real estate for a profit has become a very productive business

Humans have always been fascinated by making a lot of money in a very short amount of time. However, in this era of entrepreneurship, this desire has become even stronger and a lot more possible – given that you have a quick mind and favorable luck. Although a lot of the opportunities that come up and promise riches of a lifetime are scams and fraudulent, bogus operations that you should be wary about, house flipping is one get a rich quick scheme that actually seems to be working. A lot of wealthy investors today are buying real estate to resell it for a profit. Just in 2017, an upward of 207,000 houses were flipped!

In fact, today, the practice of flipping house has become a full-fledged, booming industry. Many rich people have employed this as their only means of income – and are very happy with the profits it generates. To aid these high flying hustlers, an altogether another industry has flourished –the hard money lenders.

The importance of hard money lenders

Properties can be very costly, depending on the area that they are in. And it is the real estate that is on the more expensive side that turns up a considerable profit when resold. Hence, people who are involved in the business of reselling houses and another real estate in order to generate a profit need to invest in more and more expensive projects. For example, houses in Houston and the rest of the US ranging from $100,000 to $200,000 have a handsome average of 54% return on investment, – a pretty good deal. But because many young investors do not have the humungous amount of $200,000 just lying around, they go too hard money lenders in the area for a house loan.

The steps leading to the acquisition of a house loan

Acquiring a loan from a hard money lender can often be a complicated and time-consuming process. It consists of several steps after which you get your hands on the money. Let us first consider all the steps involved to collect a loan and their most efficient sequence in a place such as Houston.

a)     Getting the pre-approval

The borrower gets assessed for how much he can borrow.

b)    Looking for the property

The borrower hunts for real estate that he likes and wants to buy.

c)     Making the offer and signing the purchase agreement

The borrower makes an offer to the property owner, negotiates, and confirms the purchase.

d)    Acquisition of an appraisal

The lender reviews the value of the property, and either give an appraisal or denies it.

e)     Underwriting the mortgage

Given the appraisal, a mortgage underwriter reviews all the documents involved and confirms if the loan should be closed or not.

f)      Underwriting the terms and conditions

In the event that there are unfulfilled conditions on the part of the borrower, the underwriter drafts up a document in the effort to resolve or explain them.

g)     Closing the loan

When all the conditions have been fulfilled or explained, the borrower can finally acquire a loan from the hard money lenders Houston.

So, when do I get the money?

From the above, we can see that there are two steps between getting an appraisal and closing a loan. Between these, the underwriting of conditions is often skipped if there is no such issue identified by the mortgage underwriter. Hence, the time from appraisal to closing can vary with each transaction – depending upon the existence of unfulfilled conditions.

Most times, this period will last between 4 to 8 weeks. However, this is not to say that you cannot close a loan sooner than this. In fact, though the process in itself is pretty long, working efficiently and taking initiatives where possible can cut down this time by a large margin.

What can I do to speed up the process?

To promote an early closing, the borrower has to be proactive and get things done as soon as possible. Here is a list of a few steps you can take to help things go smoothly and without any unnecessary delays.

a)     Stay in touch

Perhaps the most important of all things is to stay in touch with all the related people. Know where the process has reached at every point in time. Besides keeping you updated, keeping up the communication sends across the message that you are genuinely interested.

b)    Follow up quickly

During the process, you are likely to be asked to get some documents written or resolve any conditions. To increase the chances of a quick closure, get these tasks done without any waiting.

c)     Keep yourself financially strong

Another important aspect of acquiring a loan is keeping yourself financially stable during the entire process. Do not be extravagant and splurge around. Doing this sends the message that you are not be trusted with money – which may impede the process.

About Author

Author: Ashley Rosa

About Ashley Rosa: Ashley Rosa is a freelance writer and blogger. As writing is her passion that why she loves to write articles related to the latest trends in technology and sometimes on health-tech as well.  She is crazy about chocolates. You can find her at twitter: @ashrosa2.

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Henry Cobblah

Henry Cobblah is a Tech Developer, Entrepreneur, and a Journalist. With over 15 Years of experience in the digital media industry, he writes for over 7 media agencies and shows up for TV and Radio discussions on Technology, Sports and Startup Discussions.

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