MONEY mortgages

Here’s How Long It Will Take to Get a Mortgage

141020_REA_TimeMortgage
Dougal Waters—Getty Images

Banks are asking for a lot of documents these days, so don't assume the process will be speedy.

You’re scrolling the online listings, looking for houses, when — boom — the love of your real estate life pops out from the page. You’ve found the perfect home, with the best imaginable location, layout, size, finishes, and price. You’re ready to buy.

Just one problem: You haven’t started looking for a loan yet. And the seller will only accept offers from pre-approved buyers. Unfortunately, you won’t be able to make that happen by tomorrow.

Getting a loan, even a pre-approval, doesn’t happen overnight. There are key hoops you must jump through. How long should a borrower expect each step to take? And why must you start before you begin your hunt, especially in a competitive market? Let’s take a look.

Step 1: Comparison shopping for loans.

It’s unlikely you would buy a car, piece of furniture, or appliance without shopping around. You definitely shouldn’t take on a 30-year loan without some serious research.

Search for mortgage providers online, and visit a local bank or credit union. Schedule a meeting with a mortgage loan officer, who will pull your credit (more on that below) and give you a reasonable estimate of the interest rate, closing costs and terms you can expect. Then expand your search to other financial institutions, including community banks or other credit unions, or continue looking online, and compare the terms you’re offered from each bank.

Although each lender will look up your credit information, you don’t need to worry every inquiry will hurt your credit score. The Fair Isaac Corporation, or FICO, allows people to “rate-shop” for a mortgage without dinging their credit scores, as long as you do all of your shopping within a 14-day window. Abide by that timeline and the credit bureaus will regard that first credit pull as a “ding” but ignore the subsequent ones.

Helpful tip: When comparing lenders, pay attention to the annual percentage rate (APR), not just the interest rate. The APR covers the “total cost” of borrowing, including loan origination fees and other ancillary costs.

Total Time: 14 days.

Step 2: Get a pre-qualification letter.

Most buyers will require your pre-qualification letter before they’ll even consider your offer — but don’t worry, this step is quick and easy.

Ask any of the lenders with whom you spoke to during your mortgage shopping spree for a pre-qualification letter. These are relatively easy to get and simply give a rough, unverified estimate of the loan size you may qualify to receive. Most lenders will give you a pre-qualification based on your verbal self-reporting of your income, assets, debts, and down payment size.

Helpful tip: You don’t need to take out a loan from the same lender that gave you your pre-qualification letter.

Total Time: one to three days (overlapping with the timeframe for the first step)

Step 3: Get pre-approved.

The pre-approval stage is when lenders verify everything you’ve told them. You’ll need to supply identification documents such as your Social Security card, proof of income, assets, and employment, as well as records of any debts you hold. The lender will pull a credit report.

If you have a simple situation, such as stable employment with no debt, this process can be as short as one to two weeks. If you’re self-employed, own several other houses, have had a previous divorce or bankruptcy, have a pending court case or lawsuit against you, are in the U.S. on a temporary visa, or have other complicating factors, the loan officer may require additional documentation, which can extend the process several weeks or months.

Once you’re pre-approved, you’ll receive a conditional letter stating the exact amount of loan for which you’re approved.

Helpful tip: All else being equal, sellers often prefer to work with buyers who have pre-approval letters, rather than pre-qualification letters, particularly in a competitive market where homes get multiple bids.

Total Time: one week to several months

Step 4: Final loan approval.

Armed with your pre-approval letter, you make an offer on your dream home and it’s accepted. (Hooray!) Next, you’ll need the lender to conduct an appraisal.

In this instance, an appraisal is official verification that you’re buying the home at a reasonable market value. It protects the lender from the risk of loaning an unreasonable sum, such as $300,000 on a house that should be valued at $220,000.

Scheduling a time for a licensed appraiser to visit the property is frequently the longest part, and may take up to two weeks (depending on availability in your area, as well as the flexibility of the seller). Once the appraiser makes a home visit, the approval (or rejection) comes through within a day or two.

Time: three days to two or more weeks

The good news? Now that you’ve passed the appraisal process, you’re ready to close on this loan — and this house. Enjoy the moment, before you have to start packing.

 

To read more from Paula Pant of Trulia, click here.

 

Related:

How do I get the best rate on a mortgage?

Which mortgage is right for me?

MONEY renting

Moving in Together? Here’s How to Make it Work

Following this advice should lower the chance you'll be paying to move out sooner than expected.

You’ve done it. You’ve decided you’re ready to take the next step in your relationship … and move in together.

You’re simultaneously excited and a little terrified. That’s totally normal.

Sharing a space with someone can test whether or not you’re a good fit for each other. It can also cause some awkward and potentially testy situations if you don’t handle it correctly.

Follow these basic dos and don’ts to increase the chances you’ll live happily ever after in the same home, and won’t be paying to move out in a short amount of time.

DO: Brace for an adjustment period

Even if you’ve gotten along flawlessly up to this point, things change when you start living with someone. After all, you’ll be around them (and their quirks) 24/7.

Be prepared for a little awkwardness and getting to know each other all over again— it’s natural and bound to happen. Even the strongest couples in the world (whoever they are) experience moments when they irritate the heck out of each other. It doesn’t mean your relationship is in trouble; it just means you’re going through an adjustment period.

DO: Keep an open line of communication

If you have a disagreement or misunderstanding, the worst thing you can do is keep quiet. Even seemingly little things — like her tendency to leave dirty clothes on the floor or his failure to check with you before inviting friends over — can balloon into huge fights if you secretly stew over them.

There are very few problems that can’t be worked out or compromised in some way. The key is to stay open and communicative about what bugs you. Open the conversation with an “I” statement, such as “I feel stressed out when …,” and you’ll be on the road to domestic bliss.

DON’T: Feel like you have to spend every second together

Living with someone doesn’t mean you have to spend every waking moment with them. In fact, doing so can drive even the closest couples crazy.

In order to stay happy (and keep your relationship healthy), enjoy some “me” time at least a few times a week. Whether that means reading a good book, going out with your friends, or pursuing a hobby your partner isn’t interested in, make sure you’re allowing yourself some physical and mental space to relax, unwind, and recharge.

DO: Be willing to sacrifice a little

Yes, you hate doing the dishes. We all do. But living together successfully means that each of you needs to be willing to do the “un-fun” stuff that needs to get done. If you can go one extra step and occasionally do more than necessary, that will go a long way towards keeping things harmonious.

Surprise your significant other by relieving them of dish duty every once in a while. Offer to walk the dog tonight even though it’s your s.o.’s duty, because you can tell she’s had a long day at work. Think of little ways you can make your partner smile, and (hopefully) they’ll return the favor.

DON’T: Insist on doing things “your way”

Maybe the toilet paper was always spooled from the top in your household, but your boyfriend grew up with it reversed. Maybe your girlfriend always loads the dishwasher from the back to the front, and you’ve always done the opposite.

These little things are not worth getting upset over. As long as you’re both pulling your own weight, it shouldn’t matter if your techniques are a little different. Be willing to let go of “the way you’ve always done it” and find a new way that works for your combined household.

DON’T: Get stuck in a rut

After you’ve lived with someone for a while, you can start to feel more like roommates than a couple. Even if you both enjoy spending every weekend in your PJs watching Netflix, make a point of setting up some nice, official outside-the-house dates now and then to keep the spark alive.

Get dressed up and go to a fancy restaurant you haven’t been to before. Book a room at a B&B and enjoy a romantic weekend. During date time, no trivial roommate-related talk is allowed — don’t mention you’re running low on milk or that you need to call the plumber in the morning about that leak. Focus instead on what you love about each other and how much fun you have together.

 

To read more from Paula Pant of Trulia, click here.

 

Related:

Should I buy or rent?

 

MONEY Rentals

This Is How to Deal With Even the Most Hellish Landlord

You shouldn't have to suffer when your landlord neglects your home.
Simon Winnall—Getty Images

Many landlords neglect their rental properties. Here's what to do if the owner of your home fails to maintain it.

Perhaps you’ve called, texted, and emailed your landlord to tell him your heating is broken, your toilet is leaking, and the sink is making an interminable drip-drip-drip sound that’s driving you nuts.

But your landlord doesn’t seem to have any interest in fixing these issues.

What should you do if your landlord isn’t doing his job? Let’s look at some specific scenarios to give you an idea of your rights and options.

When Time Is of the Essence

Example: I haven’t had any hot water in my apartment for three days. Showering is awful and I’m having trouble getting my dishes clean—it’s so gross. What can I do?

Solution: Your landlord is obligated to repair anything deemed “essential” to the health and safety of his tenants. This includes dealing with heating, water and electrical issues; remediation of mold or fungus; battling bug infestations; and keeping the roof in working order.

Make sure that, in addition to calling, emailing or texting, you also send your repair request in writing to your landlord. This written proof could be necessary down the line if you get into a dispute with him.

Tip: Emailing and texting might not constitute “official written notice.” Your lease may specify which forms of communication qualify as “written notice,” so refer to that first and foremost. However, in the absence of any specific communication method stipulated within the lease, you should snail-mail your landlord a letter. Why? It’s the most commonly accepted legal definition of “written notice.”

Paying a little extra for registered mail is also a good idea if you’re worried your landlord is actively ignoring you, as your landlord will have to physically sign and date the receipt when he accepts the envelope. Plus, you’ll have documentation to prove that you sent the letter. (Save the registered mail receipt!)

In addition, keep detailed records of all important dates (when you first noticed the problem, when you left voice mails, etc…) and take plenty of pictures of the problem (with a date-stamp on the photos, if possible) to show the extent of the issue.

If your landlord does not respond to your request, you are within your legal rights to take any of the below steps:

  • Alerting state or local health and building inspectors
  • Suing your landlord in small claims court
  • Breaking your lease for breach of lease terms (it’s best to consult an attorney before doing this to make sure you have a solid case and haven’t failed to do anything you needed to do under the lease terms)

Should you withhold rent payment until its fixed? Not advisable. Your landlord might use this as grounds for eviction. It’s better to keep your situation simple.

Should you repair the problem yourself (or pay to have it repaired) and then deduct that amount from your rent? Again, that’s not advisable. You’re best off doing your job (paying rent and sending written requests) and urging your landlord to perform his job.

When Your Property Has Been Damaged

Example: A pipe burst in my wall, sending water all over the place. A ton of stuff in my closet was ruined. I called my landlord yesterday and he still hasn’t shown up. What now?

Solution: If your personal property is damaged due to negligence on the part of your landlord — e.g., he hasn’t been maintaining the pipes properly, which caused the burst pipe — then you may have a case against him for reimbursement.

This is only if you’ve taken all steps within your power, including moving your property out of the way of the water (if possible) and alerting your landlord to any plumbing issues that might have signaled there was a problem.

If the pipe simply burst and it wasn’t anyone’s fault — e.g., due to an “Act of God” such as weather — your landlord is not responsible for the damage. You should always pay for renter’s insurance to cover your own personal property if calamity strikes.

When It’s Not Life-Threatening

Example: My kitchen sink has been dripping for the past three weeks. It’s driving us all crazy and keeping us awake at night, but my landlord doesn’t seem to care. Help!

Solution: Unfortunately your landlord is under no specific legal obligation to make repairs that are not deemed “essential.” Non-essential or cosmetic issues are up to his discretion, including changing light bulbs, fixing leaky faucets and patching a hole in your window screen. These things are annoying to put up with, but they don’t pose any immediate risk to your health and safety.

How can you determine whether or your not you have the right to minor repairs? First, examine your lease agreement. Some leases specifically state whether a landlord will make only essential repairs, or whether he’ll conduct non-essential repairs that you bring to his attention.

You’ll also want to consider if your repair request is the sort of thing your landlord would be concerned about from a business standpoint. Your hole-ridden window screen is something he may not care about (until he needs to rent the apartment out again), but a leaky faucet could wind up boosting the water bill, which many landlords cover themselves — giving you added arguing power.

When the Problem Is Your Fault

Example: I had a party and things got a little crazy. My ceiling light fixture got knocked off and now it’s hanging by a thread. Why won’t my landlord take care of it?

Solution: A landlord is only required to make repairs necessitated by normal wear-and-tear or by a defect in the property (appliances not installed correctly, etc.).

If the issue is a result of damage, misuse or negligence on your part — or on the part of any guests, children or pets staying with you — your landlord does not have to take care of it. For instance, if your cockroach problem is a result of your failure to keep the kitchen clean, good luck talking your landlord into ponying up the money to take care of it.

In cases like these, you’ll have to take care of the issue yourself, on your own dime, or risk having the damage deducted from your security deposit when you move out.

To read more from Paula Pant of Trulia, click here.

Related:

MONEY 101: Should I Buy or Rent?

 

 

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser