Starting the mortgage application process could conflict with other life plans you have brewing. For instance, if you're making future plans regarding your current living arrangement or planning to start a new job in a different area in the near future you need to know when you'll close on the house. It's smart to get an idea of the average time it takes to get a mortgage.
The mortgage process has a few key steps. You have to go through the pre-qualification first, which is when the lender does a preliminary check to see if you're eligible for a loan and for how much. Then, once you’ve found a home, negotiated a price with your seller and had the home checked out by inspectors, you’ll have to fill out the official application, supply the requested documents, and then wait for the appraisal, title search and the underwriting process. It might be smooth sailing, but in some cases, it can get a little complicated and may even become a bit overwhelming.
Setting the Closing Date
When you apply with a mortgage lender, the loan officer usually tries to estimate the time it will take for you to move into your home based on his own professional knowledge of the process. This day, called the closing date, is the culmination of all your and the lender's hard work in getting the mortgage approved. You need an estimate of this date to make appropriate plans for moving from your current residence to the new home. Keep in mind that the lender often locks, or holds, your quoted rate for a certain amount of days — usually between 30 to 60 days. So it's in everyone's best interest to close before the lock expires.
Average Time to Closing
The first two key steps -- pre-qualification and filling out the actual mortgage application -- are often quick and only take a day or two. However, they make take longer if you need time to search for a home, or have problems with home inspections. The next step, which is document collection can require additional time -- how much depends on how quickly you can get the long list of items the lender needs including pay stubs, bank statements, employment verifications and acceptable final credit reports. If the loan officer identifies a problem with any of the documents, you have to accommodate his requests for new information. The appraisal commonly occurs as you're submitting documents, but could take a while to complete depending on how long it takes the appraiser to visit the home and come back with his report. The title search could take a few days to a week or more. Finally, the underwriter has to sort through every element of your loan carefully and could have piles of loans to on his desk at any given time. With all of these factors at play, the process for closing a loan could take anywhere between a couple of weeks to several months, but commonly takes about 1 to 2 months.
Communicate with Your Lender Often
In truth, the actual time it will take to close your mortgage depends largely on your lender. After you've done your part, if the loan officer or processor drags his feet during the process that could delay the loan. So communicate with your lender at least weekly to make sure everything is on track for your closing date and ask if any more information is required. If the underwriter discovers an issue when the loan paperwork reaches her desk, this could also hold up the process.
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