Time Frame and Activities from Contract to Closing.......... (contingency, documents, appraisal)

[Quaker15]

My understanding is that it usually take 30 to 60 days, but what need to happened in that period:

Day 1 - Contract signed
Day 2 - Initial loan application to get Good Faith Estimates from several lenders
Day 2 - Start inspection of home (paid by buyer)
Day 7 - Select lender
Day 10 - Start appraisal of home???? Paid and initialed by buyer or lender???
Day......

Can you fill out the rest of the estimated timing?

Questions:
1) When in the process in an escrow account set up? Who sets it up?
2) I assume the lender dictate the required insurance needed for the home and the buyer selects his own insurance to cover these required insurance, but when will this occur during the loan application stage?
3) Same question as number 2 above for PMI.
4) Who hires the title company/real estate attorney to be involved? The lender or the buyer and at what point?
5) If you are using an online lender, at the closing table, the lender won't be there, right? Will the actual closing take place AFTER all the documents have been signed and submitted to the online lender for processing?

Thanks!

[Quaker15]

Anyone?

[NinaN]

Your agent should provide you with this info. All contracts are different and much of this is spelled out in the contract. Some states take longer than others. 30 days is standard here.

[Okey Dokie]

1. If you are referring to mortgage escrow account for insurance and taxes, it is set up as part of closing and the initial amounts are collected as part of the money you bring to closing.

2. Homeowner's insurance: let your agent advise you as to how much you need to rebuild in the case of a total loss, which may not have any relationship to the amount of your loan. Your agent should send a binder to whoever is handling the closing and the first year's premium is also collected at closing.

Can't address other items, but that's Has been my experience with your first two items.

[jojow]

The process also depends on where you are. Every state is different.

[Silverfall]

Originally Posted by jojow

The process also depends on where you are. Every state is different.

This. ^^^

The process is different for each state because some states are attorney close states, some are attorney review, some are title/escrow states. It just varies too much to tell you what is standard on a nationwide forum.

[momtothree]

You should not be selecting a lender on day 7, this needs to happen before you look at homes. In my state of NC:
First week, offer, inspection, give address to lender to start loan process, get insurance. Plus any paperwork lender needs etc. I chose to go with closing law firm mortgage people uses. Happen to be one I was going to use.

Week 2, give lender insurance policy number, finalize paperwork with lender.

Week 3, fiddle thumbs, design every inch of house in our imagination. Worry about appraisal and lock in loan rates if applicable. (All done by lender)

Week of closing, satisfy any last minute closing conditions, get closing date. Call for movers. Show up at closing.

I used an online lender in FL years ago and we did our closing at a title company local to me. .

Your real estate agent handles escrow if you're talking about earnest money, your lender sets up escrow at closing if you're talking about taxes/insurance.

[dblackga]

Originally Posted by jojow

The process also depends on where you are. Every state is different.

Amen to this. In Georgia, it goes like this:

1. Contract offered
2. Contract negotiated
3. Final contract that everyone is happy with is the "binding contract". Earnest money deposited wth broker (usually buyer's broker, sometimes seller's broker if required).
4. Most buyers (that we deal with) have prequalified for a mortgage. At this time, they usually have 2-5 days to make a formal application.
5. Meanwhile, the contract is usually forwarded to an attorney's office that specalizes in real estate closings. The attorney's office orders the title, loan payoff letters, HOA documents, etc. Around here, it is customary for the buyer to choose the closing attorney; however, in some cases, the seller will require use of a specific closing attorney (i.e., new construction often requires a closing office that is famliar with their requirements, etc.)
6. At the same time, most contracts have a period of "due diligence" (5-21 days, depending on the contract), during which time the buyer gets an inspector to the property, reviews the inspection report, and gets estimates for any significant repairs, etc.
7. Usually, an "amendment to address concerns" is submitted, where the parties negotiate the repairs requested. A binding amendment is either agreed upon, or the buyer walks away as is their right during due diligence.
8. Once due diligence is over, most buyers will then pay for the appraisal to be ordered. (No sense in paying for an appraisal if due diligence reveals insurmoutable issues.) Buyer usually pays for the appraisal -- the lender certainly isn't going to eat that cost if the the buyer backs out of the deal for some reason.
9. Appraisal is done and submitted back to the mortgage company. If appraisal is low, then back to the drawing board (depending on appraisal contingency) to renegotiate, walk away or buyer to accept lower value and pay difference.
10. Credit and appraisal are sent to the mortgage company's underwriter.
11. Upon approval, the lender sends loan package to closing attorney, usually the day before closing, sometimes the morning of if they are cutting it close. Loan is funded (i.e., closing attorney receves money from lender) Lender is almost NEVER present at a closing.
12. Buyer usually wires in any necessary funds to closing attorney; brokerage either wires earnest money or agent brings a earnest money check from brokerage to closing. (Note: Earnest money check from buyer has to have enough time to clear before most brokerages will issue a check from their trust account.)
12. Closing attorney prepares the paperwork and conducts the closing, disburses money received to appropriate parties. Seller walks away with a check or wire transfer notice (hopefully!), former mortgage lender is wired a payoff, and buyer walks away with the keys to their new house and a stack of papers. :-)
13. Closing attorney records necessary paperwork.

For most closings here, the lender tells the closing attorney what their specs are for insurance (they also tell the buyer). Prior to closing, buyer sends insurance docs to closing attorney and calculates the prepaids per the lender's instructions.

With PMI, that is ordered by the lender if needed. The lender submits the application to the PMI company prior to final loan approval. The PMI company issues an approval and certificate. Details on the PMI payent are included with the instructions to the closing attorney.

Applying to several lenders after you have already written a contract is bad planning. You should have already shopped lenders before you wrote a contract and have a very good idea of which one you are gonig to be dealing with, with a backup, "just in case". You shouldn't be making multiple applications, even from just an application fee perspective.

Time? If it's an all-cash deal, it can be done as soon as the title is pulled and clear -- a week? With a mortgage, you are often at the mercy of the bank -- but most banks (with a couple of very notable exceptions that strike fear and terror into the heart of every Georgia agent, "Those Who Shall Remain Nameless") if the approval process is unexceptional and the appraisal is obtained relatively easily, can close within 30-45 days. 60 days would be an unusually long time.

But that's just one state. Your state is probably different. :-)

[brook2ga]

dblackga...excellent...and that's exactly how it worked for us. (couldn't rep ya)

[blueherons]

In South Florida, you must have either proof of funds (our cash market is about half and 75% of anything under $250,000 is all cash) or letter from your bank before you can even get in to see houses.