3 Questions to Ask Your Lender in this Highly Competitive Sellers Market

You need to ask your lender these 3 questions if you are looking to buy a property in this highly competitive market.

So you are in the market now to buy a home and have already chosen your lender. We recommend for you to ask these three (3) questions to your lender so that you can ensure your offer will be competitive and be accepted. 

1. The first question: How long does it take for your lender to be able to close escrow? Although the typical escrow is 30 days, you should aim to do better specially against stiff competition and cash offers. Nowadays, a lot of lenders can close in as little as 21 days with some closing in as little as two weeks with financing. An offer that closes escrow in 30 days or more is most likely not going to be accepted by the seller. We suggest to write an offer to close escrow within at least 25 days or if your lender can, in 21 days.

2. Second question is: how long does it take to get the actual loan approved? In California, a buyer has 17 days on the contract to remove their loan contingency. However, if you ask for 17 days on the purchase agreement, it is almost guaranteed that your offer will not be accepted. Currently we are seeing several buyers requesting just 8-10 days for their loan contingency or removing their loan contingency all together. In order for your deposit not to be at risk, it is important to find out from your lender how long it takes to get the loan fully approved. Make sure you are fully pre-approved upfront by giving your lender all of your financial documents they request from you. 

3. Third and the last question to ask is whether your lender is a direct lender or a mortgage broker:  A direct lender is someone who actually lends their OWN money. A mortgage broker will shop you loan around to other lenders. This is not necessarily a bad thing since a lot of mortgage brokers have different programs for different buyers - Some are W2, others are 1099, self-employed, no bank statements etc. If you are working with a mortgage broker, remember that they do not have as much control over the loan because there is an actual lender. The mortgage broker needs to ask the lender the same questions mentioned above and make sure they meet the recommended number of days to close escrow and fully approve the loan.

“You will give yourself a better chance to have your offer accepted if you ask these 3 questions to ask your lender.”