Buying a house in Philadelphia is competitive and you need the advantage of fast underwriting, it also means taking on a large amount of debt in the form of a mortgage. Getting approved to borrow that much money requires a lender to go through your finances and credit history with a fine-tooth comb, and that takes time. Pre-qualifying for the mortgage helps reduce the amount of time it takes for approval, but it still takes weeks, sometimes months, for the lender to approve the mortgage.
Fast underwriting, also known as fast track underwriting, helps buyers get funded quickly and the closing done sooner than later. Here’s how fast turn arounds help buyers and realtors complete the deal on a home.
What is Fast Underwriting?
Fast underwriting is based off an applicant’s credit score instead of income. Someone who has an excellent credit score is considered to be of the lowest risk and capable of making the payments. The logic is based on the fact that the applicant has been more than responsible with their finances and will continue to be responsible with a mortgage. While income does play a role in deciding how much money the borrower can handle repaying every month, it is not the driving factor in deciding funding. For more in-depth information about how this works, contact a Philadelphia mortgage company to learn about the finer details of fast underwriting and how it helps close a home sale sooner than later.
How Speedy Underwriting Help Buyers?
Sometimes a house in Philadelphia gets multiple bids from buyers, but not all buyers can close quickly. The person who has the highest offer may be pre-qualified, but it’s still going to take time for the bank to underwrite and issue the mortgage. When a buyer wants to sell the home fast and not wait, they’re more likely to commit to a buyer who can get the mortgage the soonest. That means a buyer who can get a mortgage with fast underwriting is going to have the advantage over the other buyers even if their bid isn’t the highest.
Fast underwriting also has a benefit in the form of locking in a favorable interest rate. Interest rates are not known for stability and can fluctuate up or down at a moment’s notice. It sometimes happens that a small increase in the mortgage rate pushes the monthly payment to an uncomfortable amount. Fast underwriting can get ahead of an interest rate rise by getting the mortgage locked down on a day when the rates are lower.
Perhaps the biggest benefit to fast underwriting is the fact that the time waiting for approval is reduced. There’s less worrying about lost paperwork, less time waiting for a phone call from the lender, and a borrower is less likely to feel like they’re being ignored by the lender as underwriting progresses.
How Quick Underwriting Helps Realtors
As previously mentioned, the closing process can take four to six weeks and sometimes longer if something needs more research during the contract period. What this means for a realtor is they have to spend more time paying attention to the sale process to make sure that the sale will reach the closing stage. And it also means waiting longer for the payout which can mean stretching the budget for longer.
Less time is spent waiting and monitoring the sale when the client qualifies for a fast track mortgage. The house is put into the sold column quickly and enhances the Realtor’s reputation as someone who gets homes sold quickly. And getting the home off the books sooner than later means a Realtor can focus their energy on their next home sale. The distractions that come with monitoring a pending home sale are eliminated because the fast underwriting on the mortgage got the home closed sooner than later.
Consult with a Philadelphia mortgage company about qualifying for a mortgage with fast underwriting. Having an excellent credit score can reduce some of the stress that comes with buying a home, so why not take advantage of it?