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What is a realistic timeline for funding a purchase loan?

When making (or reviewing) an offer to purchase, what is a realistic timeline for funding a purchase loan (i.e., what is a realistic timeframe for a financing contingency, understanding that this may vary based on market conditions)?

Given that one of the "accepted elements" of a "clean offer" is a short escrow, in your experience are buyers/REAs overly optimistic when setting this date in a purchase contract?
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September 21 2013 - US
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Answers (12)

Yes, of course, credit check! Thought that was a given. Rather than putting forth a loan app checklist here, the importance of directing a buyer to a trusted LO cannot be understated. Don't LO's and R/E agents have the same goal in mind? Guiding our clients through the process is what creates the relationship, ensuring that they will seek you out in the future as a Trusted Advisor. The process should not be "love 'em and leave 'em" transaction. Now, I've gone down a tributary... 
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September 22 2013
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So...

Thirty (30) days is a reasonable timeline for financing contingency if the buyer's lender has had a chance to review...

-- W2s (or other proof of income)
-- Two (2) months of bank statements
-- Two (2) years of 1040s

Anything else? Credit check?

If the lender has not had a chance to review these docs, then does the window expand to 45 days? Or, is it just "optimistic wishing" on any timeframe until these docs are provided to the lender?
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September 22 2013
Groundwork should be having nearly every document needed from the borrower in the LO's hands at or prior to signing the contract.Then, I think 30 days contract to close is realistic. There just has to be some wiggle room to handle any unforeseen issues. If they don't come up, great, then everyone is happy. I have seen some very strange things come up on even "golden" borrowers (thru no fault of the borrower or lender), that ate up loads of time in resolving. Everyone starts to panic.
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September 22 2013
30-45 days... if you do most of the work up front prior to offering on a property, you are in a much better (and more solid) position
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September 22 2013
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Barb brings up an interesting point.

Is "30 days" a start-to-finish timeframe, or does that assume a certain amount of preliminary groundwork has already been done? If so, what groundwork?
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September 22 2013
I generall advise A 21 day Mortgage contingency and 30 days for closing However most of our files are clear within 10 days Good luck with your search and if you have further questions please feel free to contact me through my profile.
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September 22 2013
Go for it! Woot!
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September 21 2013

30 days or bust

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September 21 2013
From Illinois and the other states I am personally licensed in...Here's my two cents:
A lender should never routinely ask the parties for an extension. In Illinois, we have cardiac arrests if the financing contingency is not met, let alone asking for an extension on the closing date. As a lender, I have experienced transactions in other areas, rural, urban, or vacation, where it seems customary to be flexible regarding contract deadline dates, to a certain extent.

That said, be realistic with contracts. Most LO's understand that R/E agents need to present the very best offer and time frames to the seller. But, I think I speak for many lenders here to respectfully encourage your buyers to get with a lender that they trust long before a contract is signed. This limits any surprise factors.

30 days to mortgage contingency is reasonable at this time, assuming that your client has been actively engaged with a lender. 45 days for a closing date is realistic given the prior info, but I always suggest a tad longer to be on the safe side. Extensions make everyone nervous.

So yes, I think that ALL parties in contracts right now are overly optimistic. Buyers may be anxious, but the devil in the details in terms of lending has not changed....
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September 21 2013
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Yes, I would appreciate input from all locales. It would, however, be helpful to preface your response with your locale.

I am especially interested in lender input.
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September 21 2013
Would you like opinions/comments from non-CA lenders? Well, my company is, I am not personally licensed in CA, but I am never short on opinions.
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September 21 2013
We generally give 30 days for the financing contingency (loan commitment) with a close date 35-45 days out.
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September 21 2013
 
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