Why Does Getting a Mortgage From a Bank Take So Long?

Obtaining a mortgage loan is usually not a speedy process.

Obtaining a mortgage loan is usually not a speedy process.

The home-buying process can seem like it takes longer than a PBS documentary on the mating habits of the vervet monkeys of Zimbabwe, especially if it's your first home. In reality, the process typically takes from four to eight weeks. You can do your part to speed up the process by obtaining required documentation ahead of time, like W-2 forms, contact information for previous landlords as well as for previous employers.

Forms, Forms and More Forms

The amount of paperwork involved in a mortgage transaction can be mind-boggling. You'll need to complete a lengthy application and accompanying forms. You'll also need to provide written documentation about your financial history. And when you attend the settlement meeting, you'll have to sign a variety of forms until your hand resembles a hideous claw-like object; all of these forms take time to prepare and process by real estate professionals and mortgage lenders.

Verification

When your loan application goes through the underwriting process, the mortgage underwriter will need to verify the documentation you've provided. While things like your credit history and current employer can be verified quickly, it may take longer to verify your employment history or previous residences, particularly if past employers and landlords are less than cooperative. Of course, if you can't supply documentation on your end like W-2 forms, it will also lengthen the process.

Getting Appraisal

You will need to get an appraisal to help determine the value of the property you're buying. Depending on the heaviness of your selected appraiser's schedule, this could happen quickly or it may take some time to arrange. Your real estate agent may already have a working relationship with an appraiser or two which can help facilitate the process. If not, it may take time to seek one out.

Professional Competency

If your real estate agent is relatively inexperienced, she may not be able to anticipate all the potential problems that can sidetrack the mortgage approval process. The escrow agent may not necessarily move quickly to finalize the transaction and prepare all the necessary documents, so it may take them a while to schedule a closing date. As with obtaining the appraisal, an experienced real estate agent will likely have a working relationship with one or more escrow companies.

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