Average mortgage completion times are just that – averages
The typical time to get a mortgage is between 45 and 60 days.
This is the time it takes from loan application to "loan financing" – when the new home or refinancing loan is officially closed.
Depending on your loan type, credit profile, and loan purpose (purchase or refinance), your mortgage may close faster or slower than average.
If you haven't applied yet or haven't found the right home to buy, your closure period may be longer.
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How long does it take to close a mortgage?
It took 52 days to close a mortgage from March 2021, according to loan software company ICE Mortgage Technology. However, the time to complete can vary widely depending on your circumstances.
The time it takes to close a mortgage depends on where you are in the buying or refinancing process.
The home loan process itself – from application to completion – typically takes between 45 and 60 days. If you're refinancing a home that you already own, this is your entire timeline.
However, when buying a new home, you need to consider the process of finding a home.
You need an accepted offer to approve a mortgage. So you can only start the process completely when you have found the house you want. This can add an extra 1-2 months or more to your timeline.
How long does a mortgage take if you haven't found a home yet?
Closing a house takes time. Exactly how much time depends on your “starting point”.
If you haven't found your dream home yet, you can spend a month or two visiting homes with a real estate agent.
Once you find the home, it can take one to five days for you to submit an offer, let the seller review your offer, negotiate, and reach an agreement on the price and other aspects of the property transaction.
At this point, you can submit the full home loan application. (You can't apply earlier because a lender can't approve a loan until you've selected a home.)
You can speed up this process by obtaining pre-approval for a mortgage as soon as you start looking at homes. Don't waste 30 to 60 days being wasted.
When pre-approved, the lender gives a thumbs up to all aspects of your home loan except the property. Once you have an accepted offer, your lender already has a serious head start on your final approval.
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Once you've found a home to buy, how long does it take to close the mortgage?
If you've already found a home, it will likely take between 45 and 60 days to close the mortgage based on national averages.
Remember that your situation can vary widely depending on your creditworthiness, employment history, and other aspects of your financial life.
You can speed things up by preparing for the seven steps of underwriting outlined below.
In today's marketplace, the valuation report can be a major sticking point. Due to regulations, many appraisers left the company after the property downturn in the late 2000s.
This can make it more difficult to find reviewers today. Check with your lender for current review times based on recent history.
A bright spot: Fannie Mae and Freddie Mac can also waive the assessment requirement for some purchase credits. This helps with closing times.
But you can't count on that. Be careful not to promise your seller a closing speed that is too high. A key date is specified in your sales contract. You are expected to hold onto it or possibly lose the home and serious money.
Most importantly, have an honest conversation with your loan officer about how long it will take to finalize your mortgage loan.
Ask for a realistic or even pessimistic valuation considering the underwriting, processing, valuation, health review, and closing / financing.
Better to guess "long" is better than having overly optimistic timeframes that you cannot reasonably hit.
How long after the exam to close a mortgage?
When your evaluation is complete, congratulations. You have completed one of the longest steps in the buying process.
You may be wondering how much longer you have to wait.
Typically, mortgage insurers will work on your approval while the assessment is in progress. When the evaluation comes in, the lender should be more or less ready to go.
It shouldn't take more than two weeks to close your mortgage after the valuation is complete.
It should not take more than two weeks for the assessment to be completed.
However, that is not a promise. There are still many potential problems.
Your lender may find an issue with the appraisal (peeling paint, roof in need of repair, etc.) that needs to be addressed. Or the seller may have a problem with the home they are buying and are delaying the sale.
But don't let these things bother you. They are common and are usually resolved in one way or another. Nevertheless, be vigilant with your lender. Make sure your file expedites the rest of the loan application process.
Mortgage closing times by loan type
The type of loan you get can have an impact on your closing time. ICE Mortgage Technology breaks down the average completion times by loan type:
Conventional Loans: 51 days, FHA Loans: 55 days, VA Loans: 57 days
Note that closing times vary greatly depending on the situation. For example, a cash buyer could close within a few days. A mortgage borrower with questionable credit and income may take 60-90 days or more.
If you're trying to close a home quickly, apply for prequalification with your lender ASAP – even before you find a home.
A word about closing times and tariff barriers
When you mortgage a home, your interest rate is based on the time to close. The fewer days you need to get from the "interest freeze" to "close", the lower your mortgage interest rate.
This also applies to purchase mortgages and refinancing loans.
For each additional 15 days it takes to close your loan, your stated mortgage fees will generally increase by 12.5 basis points (0.125% of the loan amount).
The fewer days it takes to get from “Interest Freeze” to “Close”, the lower your mortgage rate is likely to be.
However, you do not have the freedom to choose the shortest possible mortgage freeze period and then extend it for 15 days at a time as needed.
At the beginning of the mortgage approval process, mortgage lenders require borrowers to indicate how long they want to hold their loan for.
The typical mortgage rate locks last for 30 days, 45 days, or 60 days, with advanced mortgage rate locks available upon request.
Ideally, borrowers should choose the shortest lockout period that allows the lender to complete the loan process. and for home purchases, this applies until the home closing date.
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What affects mortgage closing times?
It now takes an average of 52 days to complete a new home loan, according to ICE Mortgage Technology. This is an average of the buy and refinance transactions.
The current closing times have decreased from 58 days at the end of 2020.
Still, it takes longer than most consumers think to get a loan. That means home buyers and home refinancing should be planning longer mortgage lockouts than they originally anticipated.
Remember: mortgage locks move in 15-day increments – and it now takes an average of 50+ days to complete a home loan.
There are a number of reasons why loans can take longer than 45 days:
Mortgage lenders cut staff as interest rates rose through 2018. Now that the interest rates are so low, they are making an effort to hire staff to handle loan files. In many states, lenders are still grappling with home orders stemming from the COVID-19 pandemic, triggering a wave of purchase applicants. Rising rents also ignite a fire among home buyers
All of this creates a crush on mortgage lenders who, frankly, were unprepared for the workload.
Despite technological improvements, banks sometimes cannot keep up with demand.
Regulations slow down mortgage closures
There's another reason lending takes longer: the TILA-RESPA Integrated Disclosure laws that came into effect in late 2015.
The essence of TRID is that mortgage lenders are required to send certain documents to the mortgage borrowers 72 hours in advance of closing and that changes to the documents require re-disclosure of these terms and an additional 72 hour waiting period.
The closings have taken another three days since October 2015. a government mandated delay affecting all closed loans.
You should check with your lender when choosing the length of your interest freeze. Shorter locks are ideal, but not always available.
7 Steps to Speed Up Your Mortgage Closing
When your mortgage loan goes to a bank for approval, there are roughly seven separate steps in the loan application process. What follows is a brief explanation of each step and what you possibly can do to speed up your loan.
Note: For best results, the first three steps can and should be followed in front for shopping for a home.
Step 1: The first mortgage application
When you submit a mortgage application to your lender, it is completed either in person, over the phone, online, or through an app.
Filling out a mortgage application will take 20 minutes to an hour if you are prepared.
Your employment and address information for the past two years is ready. The contact information of your employer and landlord is useful. Your account statements as well as account statements for retirement and investment accounts. Proof of your income, which can be on pay slips or tax returns so the lender can determine your debt-to-income ratio
In many cases, upon receipt of your application, a lender will be able to offer "preliminary approval".
This means that your loan will be approved subject to certain conditions – provided you can back up the information given above with supporting papers and documents.
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Step 2: Provide supporting documents and documentation
Once your preliminary approval has been granted, your mortgage lender will ask you to provide paperwork to document the information you shared as part of your application.
Typically, these documents include pay slips, W-2 bank statements, federal tax returns, and bank statements for your savings and retirement accounts.
Other documentation requests may include copies of business licenses, deposit gift letters, and evidence that a student loan is on hold.
After reviewing the records, your mortgage lender may request additional supporting information, including written explanations of “large, atypical deposits” in your bank account or other matters.
Reviewing your loan records is a task that is usually completed within two days. However, sometimes it can take up to a week.
In general, the faster you respond to your lender's request for documentation and supporting materials, the faster your file will be processed.
Step 3: the loan approval letter
Once the lender has reviewed your records and "de-registered" them, they will issue you a pre-approval letter.
A pre-approval letter is your proof that your loan can be approved, as long as the property you purchased meets the lender's guidelines and you don't make any "material" changes to your application.
Significant changes include a change in employment, income, credit, marital status, or down payment.
Changes in your application do not necessarily invalidate your consent. However, they will require your loan to be re-subscribed and approved.
This could extend the closing process considerably. Therefore, if possible, avoid making financial changes before graduation.
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Step 4: the home valuation
As the next step in the mortgage approval process, your mortgage lender plans a home valuation.
For home buyers, this step is only done after a home has been selected and the home inspection completed.
Refinance from homeowners who opt for an FHA Streamline Refinance or a VA Streamline Refinance does not need to be assessed.
The evaluation can take up to a week, depending on the property. It can take a week to hit a reviewer's schedule.
Therefore, when it is time to schedule the evaluation, try to schedule it as soon as possible.
Every day counts when trying to maintain a tariff lock. So if the appraiser wants to come to your home tomorrow morning, find a way to make it happen!
Step 5: The review of the home valuation by the lender
After the evaluation is complete, the lender will double-check it for validity.
In general, the valuation process for mortgage lenders is lax – the appraiser is the expert, after all.
However, if the estimated home value is more than a few percentage points higher than the lender's expectation of what that value should be, the lender may request a second valuation to verify the valuation.
Scheduling this second home appraisal can add another week to your degree, which can increase your mortgage rate and closing costs. However, this is rare.
In most cases, lenders will accept the appraiser's appraisal of a home as it is and issue “final approval” indicating that the loan will be approved subject to certain closing conditions.
As a borrower, your closing conditions may include taking out your homeowner insurance policy, depositing your deposit into an escrow account with the title company, and signing your final mortgage documents.
Step 6: completing the mortgage loan
After the lender has given its final approval, all that remains is to close the mortgage. However, until the completion of the deal, it is your duty as a borrower not to change anything that could affect your mortgage application.
For example, between your final approval and your closure, don't quit your job, buy a car, move furniture, apply for a credit card, and most importantly, don't miss out on any monthly payments to a creditor.
Any of these events could result in your approval being revoked. Only when your loan is funded and the money has changed hands can the loan be considered final.
Step 7: The withdrawal period (only for refinancing)
When refinancing a primary residence loan, closing does not mean the end of the mortgage loan – there are an additional three business days on which the loan can be canceled.
These three days, known as the withdrawal period, are the borrower's right. They give homeowners an opportunity to change their mind and cancel the loan entirely.
The three-day right of withdrawal cannot be canceled and must be included in the lock-up period for mortgage interest.
Frequently asked questions about closing mortgages
After the assessment, how long does it take to complete the degree?
Usually about two weeks. However, this is not a promise. Your mortgage insurance process may take longer if you have a low credit score or are self-employed and need to provide tax certificates to document your income. It is also possible for a lender to request a review of the rating and delay closing for a week or more.
How many days before close will you get mortgage approval?
Federal law requires a minimum of three days between your loan approval and the completion of your new mortgage. They can be conditionally approved for one to two weeks before closing.
Can you close a house in two weeks?
If you're a cash buyer, you can close a house in a matter of days. A mortgage loan takes longer to take out – almost two months on average.
Can a loan be declined upon completion?
This is rare, but not impossible. To avoid this possibility, do not make any changes in your financial life between the submission of the application and the signing of the financial statements. Significant changes in your credit rating or your income can jeopardize your approval. It is also possible that new information about the property itself will change the lender's mind about your mortgage. Make sure you read and understand your home inspector's report before closing it.
Do I know the size of my mortgage payments before I close?
You can get a good idea of your monthly mortgage payments before you close. However, remember that your monthly payments include more than just paying back the loan and interest.
For most homebuyers, monthly payments also include: Property Taxes – Mortgage loan service providers collect your property taxes along with your loan payments and then pay your local tax authority annually; Homeowner Insurance Premiums – A portion of your monthly payment goes towards homeowner insurance annual premiums. Mortgage Insurance – Unless you pay a 20% down payment on a conventional loan or are a veteran who qualifies for a VA loan, you owe mortgage insurance premiums every month.
These fees vary depending on the type of loan and the location of the property. Your broker or mortgage broker can help you estimate your total cost before closing.
What are today's mortgage rates?
The faster you can get a mortgage, the lower your mortgage rate can be. Know the steps in a mortgage approval and know where it will save you time and time to get to close faster.
Start your mortgage application as soon as possible for a better chance of getting a home loan quickly.
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