Timeframe to Buy a House

[Leo Maldonado]

Good evening, my name is Leo, and my girlfriend and I are looking to move out our parents house and buy our first house in New Jersey. Preferably in Bergen County, or Passaic County. We both know that in this market it's hard buy a house but I believe we may have our opportunity to buy into our first house. To make this post short I would like to know what is the average time frame to buy a mfh in our current market since we're trying to move out. 

[Bruce Lynn]

Congrats on moving forward.

Typically once you are under contract about 30-45 days.   How long it takes you to get under contract and find the right property...well that could be weeks, months, depending on your market, how picky you are, and how aggressive your offers are.

Good thing is you have a place to live.

First step is to find a great lender and get prequalified for a loan...see if they will underwrite your file up front.  Not every lender will, but the really great ones will.  That way you have all your documentation in, and they're just waiting for a contract and appraisal.  You can move faster and close quicker when they do this for you.  It's also a risk reduction tool to help you know you are good to go and really just dependent on an appraisal.  Just saw a guy get almost to closing and now can't close because income to debt is a bit off....so he'll loose option money and appraisal money and potentially earnest money due to this.  Better to know up front all your documentation is lined up so you don't have those problems.  Also if you're underwritten up front, you can potentially close in as fast as a couple of weeks.   Let your lender advise you on this and the timeframes.

Also knowing how much credit they will give you on rent vs your mortgage will also help you make pricing decisions.   Some lenders might not give you any rent credit for new investor on a duplex, or some might give you 75% of the rent collected, so then you'll know how much of the mortgage you're responsible for each money.

Also working with lender now can help you save some money.  For example they may tell you to save more for down payment, or to pay points to bring your interest down, or improve your credit score a few points to get a better interest rate or lower down payment.  So starting now can give you time to make those changes.