The following explains each deadline and the most common delays that can occur.
Closing deadline – Absolute deadline 11/30/2009 – Safe deadline – 11/16/2009
To receive the $8,000 first time homeowner tax credit, you must have your home ‘funded’ by your lender and recorded into your name by 12/1/2009. Therefore your absolute deadline to sign your paperwork is 11/30/2009. That only gives you one day to fund and record your home at the county or else you will not get the $8,000.
Safe deadline – Sign your paperwork by 11/16/2009. Why?
- The Real Estate Contact states it can take up to 4 business days to fund and record your purchase. I have seen it take as many as 7 days to fund and record.
- Some lenders require that they have 2 days after you sign to review the final paperwork.
- Some lender may require that additional conditions be satisfied even after you have signed the paperwork and before they will fund.
- Thanksgiving is a two day holiday within this closing date time frame.
- There will certainly be a rush of new homebuyers trying to beat the absolute deadline so title companies and lenders will be overloaded.
- Lowest closing cost deadline – 10/29/2009 – One of your closing cost amount is the interim interest from the settlement date (signing date) to the end of the month.
Loan Application Deadline (after you have a signed and accepted offer)
Safe deadline 10/1/2009 – Lowest closing costs deadline 09/15/2009
After you have an accepted offer from the seller, in the past it would usually take 30 days to close on your loan, but during this special time you should allow 45 days to close. Why?
- Lenders, mortgage companies, home inspectors and appraisers will be flooded with new buyers trying to beat the deadline to get the $8,000 tax credit money. This will surely cause a delay in approving your loan.
- You might have to clean up your credit report due to errors that are on it.
- There are new lending rules that state the buyer must have the final closing statement and amounts given to them to review at least 3 days before closing. With the 30 day close, this document has not been ready that soon.
- The new Federal rule (called HVCC) of the ‘pool’ of appraisers has caused delays in getting a home appraised in a reasonable amount of time.
- Your might need to arrange a ‘gift’ from a family member to cover your down payment or closing. That person may need a few days to get (or sell off an asset such as stock) and transfer the money to you.
- If your home inspection reveals a problem and the seller is not willing or able to repair or replace it, you will be starting all over trying to find a home.
- Your company is required to verify your employment. This can only be done via the mail and some HR departments are slow in responding.
- You will need to gather 2 year’s of tax returns, 2 months of bank statements and 2 pay stubs to give to your lender. Your assets may need to be verified.
- Vacations (yours, the loan officer, the loan processor, the lender, the Real Estate agents) and holidays (Thanksgiving, Labor Day)
Deadline to start seriously looking for a home – Safe deadline 8/15/2009
It can easily take you 6 weeks to find a home, make an offer for it and get it accepted by the seller. I have had buyers find a home the first time we look and I have had buyer never find a home they are satisfied with. Why 6 weeks?
- Low inventory – Other homebuyers will also be looking for a home, especially first time homebuyers.
- A home that meets your criteria and price range may not be available when you first start looking.
- It can take a week to 10 days to make an offer and address counter offers between the buyer and seller to get a fully accepted offer.
- Scheduling delays to view the homes you have selected. These delays could be your work schedule, from your Real Estate agent schedule or from the seller.