CHAPTER 5-The Loan Process

Home Loan Processing

The last few days before the close of escrow will be frantic and you need to be prepared, emotionally. You will probably be packing and worrying. Don’t plan any trips for this time period if at all possible. There will be signatures required on a tremendous number of documents during this time. If you are with the Preferred Lender of a new home builder you will be signing loan documents (your promise to pay over time) and other documents about seven days before the close of escrow. A lot happens after that, before the official “Close of escrow”. If you have decided on another company for your loan, it is up to you to encourage them to coordinate with Escrow in a timely manner. They may have an opinion about when they can get the documents to Escrow that is unrealistic. Ask your New Home Sales Professional or Realtor what happens if they don’t get their loan docs in on time.

After you sign the documents, they go back to Escrow. Escrow unbundles them and returns the loan papers to the lender. The lender must then examine and approve them. Then they will fund the loan to Escrow. When the funds are in, Escrow sends the Deed to the County for recording. The County then informs Escrow. Escrow or your Sales Professional will contact you that escrow has now officially closed and you may make an appointment to come pick up your keys. Because of these substantial efforts, it takes every bit of the seven days to get this done. So, putting off signing your documents even a day later than requested can cause unfortunate results. Be flexible during this week. Share with your supervisor at work that you are purchasing a home. It is an exciting time and you should find them quite supportive of your needs to accomplish the American Dream of homeownership.

If you are assembling a down payment, Escrow will inform you when to bring those funds in to them and in what form. Wiring funds from a bank or stock account can take up to a week. If you are borrowing from a 401-K or other financial instrument, it is important to know the process now. Do not wait until two weeks before the close of escrow to learn that it takes 60 days to remove funds from your particular 401-K, as is the case sometimes.

IMPORTANT - In all things, get your part done as quickly as you can. There are so many elements and people involved in the process. If you are the one that slows things down, don’t blame anyone else when escrow does not close on time. You may have to take time off from work to get certain things done. You might have to change your schedule for a particular day at a moment’s notice. Don’t delay these important items: completing your loan application, doing the final walk through, signing your loan documents, bringing in your final funds. If you are getting gift money from a relative and a gift letter from the same, do it early. If you need a letter about alimony, child support, or explanations of past credit problems get them early. If you are recently, or currently in the process of a divorce and need a quit-claim from your spouse, get it soon. Buying a home is not iffy. It is clearly a YES or NO transaction. If you are feeling uncomfortable about your decision, answer the yes-or-noquestion first, then ignore your discomfort and get your part of the job done.

Story – A hesitant Buyer of a home in Elk Grove, California just couldn’t answer the Yes No question. She wouldn’t communicate with her Loan Officer. She delayed the walk through. She waited an extra week to bring in her final funds. She delayed the signing of the loan documents until after the walk through. Then her lock expired. The interest rate shot up and the cost to her came to $150 per month for the life of the loan. She was angry about the situation and blamed everyone else, but SHE STILL CLOSED ESCROW! Looking back, it was only her fear that messed everything up. If she had just done her parts on time everything would have gone more smoothly and had a better financial outcome for her. As Pogo said, “We have met the enemy and he is us.”

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About the author

Robert N. “Bob” Bekins is the Owner/Broker of North County Realty Associates headquartered in San Diego County, California. He has been a Sales Manager with major national home building companies, in international property sales, and in traditional resale. With over 1,000 homes transacted he is qualified to be a fine advocate for your needs in that part of California. You may reach him by texting or calling 760-505-9397 or at Hope you have enjoyed the book and now Happy Hunting and may you live long and prosper in your new home!