Buying a house is a big step, full of excitement and anticipation. As you look forward to taking possession of your new home, you may have many different concerns and questions. The typical timeframe to close on a house varies, depending on the specifics of your situation. Generally, the entire process should take about one month unless problems arise.
When you decide you want to buy a home, approaching a lender is one of the first steps toward securing a loan. You can approach a lender before you find a home or after you find one you want to buy. To initiate the application process, gather your current income and bank account information. Fill out the multi-page application completely and accurately, supplying your precise income, bank account numbers and the balances of your accounts. The process to fill out the application should take less than one hour.
Once you submit your application to the lender, the pre-approval process may take only minutes if you seek an automated approval. This process involves an electronic credit check to determine whether your credit falls within the eligible parameters. If your credit checks out, you will receive pre-approval for a mortgage. If your pre-approval is a manual process, it may take one or two business days to get a decision. Once pre-approval finishes, you will know how much house you can afford.
After pre-approval, your application enters into the verification process. During this time, the lender performs a thorough examination of your income, employment history and creditworthiness. The lender seeks to verify and validate all the information you provided on the application. As long as the lender does not encounter any issues with your documents or the information, this process should not take more than one week. If problems arise with credit or the lender discovers undisclosed or fraudulent information, the verification process may take longer to enable closer examination and additional documentation. The length of the resolution process varies from lender to lender and depends on the specific nature of problems.
After your mortgage passes verification, the lender proceeds to the underwriting process. This process involves ordering an appraisal of the house to ensure that the house value supports the purchase price. The appraiser must perform market research and then evaluate the house to deliver an appraisal report. The lender also orders a title report to ensure that the real estate title is free of liens that would prevent the transfer of the title. The underwriting process may take up to two weeks under uncomplicated conditions. If either the appraisal or title research turns up issues, the underwriting process may take longer while parties work to resolve issues.
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