How long does it take to buy a house today?

How long does it take to buy a house today?

This summer brought two monumental changes to the lending industry. First, the HVCC eliminated a mortgage broker’s or lender’s ability to deal directly with an appraiser. Second, the Regulation Z was modified effective July 30, 2009.

So, what does this mean and why should you care?

For the HVCC rules, when your lender can’t communicate directly with an appraiser, it drastically slows down the process. This new rule has made it virtually impossible for mortgage brokers or lenders to order the appraisal at the time necessitated by the circumstances of the transaction. In addition a mortgage professional is now going to get whatever appraiser is assigned to the transaction through a new, unnecessary third party. While this may not sound like a big deal, most mortgage professionals have built relationships with appraiser who are able to perform in a timely manner and who turn in competent appraisals.

Now, many times the mortgage professional has no idea who is handling the appraisal or when it may be completed until the time the appraiser contacts the homeowner for an appointment. This change in the handling of appraisal ordering and management has resulted in delays for many transactions.

The new REG Z. This is a federal regulation that was modified effective July 30, 2009. With these new modifications, mortgage professionals are delayed in being able to set certain aspects of the loan application process in motion until the expiration of new and extended waiting periods. These waiting periods add anywhere from one to two weeks in the loan application process, even if the borrower submits all their information in a timely manner.

In addition, the entire lending marketplace is reorganizing itself. Loan programs and lenders that were once considered nearly institutional and always reliable have nearly disappeared or have been changed so dramatically that they are no longer viable. Mortgage professionals are trying to find their way through a landscape of changing players, changing rules and unknown futures.

As a result, many times it will take more than 30 days with today’s standards to buy your home.

If you’re a first time buyer looking to take advantage of the tax credit, remember you need to have the sale closed by November 30, 2009. So, you’d better hurry and pick that home if you want a chance at getting your sale completed in time!

If you’re an investor or looking to move-up, make sure you have a detailed conversation with your real estate agent and mortgage professional, so that you can accurately set the necessary deadlines in your contracts.