Buying a house is something most people dream of accomplishing in life. It is also one of the largest purchases most will make. It is both exhilarating and slightly nerve racking.
If you have a desire to purchase a house, you have most likely asked, “how long does it take to close a mortgage?”
The answer should be simple, but realistically, each mortgage loan is unique; therefore, every transaction closes in a different amount of time. However, the average time it takes to close a mortgage loan is 30 days.
We’ve organized a general list of the process and approximately how long each step may take.
1. PRE-QUALIFICATION – 30 minutes to three days
This step can be as simple as a phone call or a few emails, but depending on your income and credit, it could require a larger amount of research. In this process, information and documentation are needed to analyze credit, income, assets, and ability to repay a loan. At the end, your mortgage loan originator issues a pre-qualification letter stating how much you could be approved for.
2. PRE-APPROVAL – Two hours to three days
Though not a required step, we highly suggest it—especially prior to purchasing a home. This process takes a deeper look at the data gathered from the pre-qualification process. Information about credit, income, and assets are put into a computer program which checks against current lending guidelines. The program then generates a document with a stamp of “approved” or “denied.”
3. APPLICATION & DISCLOSURES – One to three days
The law requires buyers to sign a set of documents, validating the information provided. Depending on the technology a lender uses and the complexity of the purchaser situation, these documents can be generated in a matter of a minutes or days.
4. UNDERWRITING & APPRAISAL – Three to 14 days
This step can cause the most anxiety. An underwriter reviews all the submitted information, checks it against lending guidelines and regulations, and provides the actual approval or denial. If approved, it will be a “conditional approval,” requiring additional documents to make the file complete. During this time, an appraiser is also doing research to determine the value of the home the loan will be tied to.
*PRO TIP: If you are in a hurry, you can pay an extra $50 to $200 for an expedited appraisal to make your request a priority of the appraisal company. This can shorten the stage by up to 10 days.
5. MEETING CONDITIONS – Two to 14 days
As mentioned in the underwriting step, the approval issued is a conditional approval. It requires meeting specific conditions prior to the loan closing. These conditions could be something as simple as providing an updated bank statement, or as complicated as writing a letter to explain an issue the underwriter found. The speed of this process depends on the level of communication between you and your lender.
6. SIGNING – One to three days
Once all the conditions are met, a “clear to close” is issued. This status allows the lender to draw up the final loan documents and prepare the wire to fund the loan. When the documents are drawn up, they will be delivered to a title company or closing agent to be signed, notarized, and recorded with the county.
7. FUNDING & CLOSING – One to three days
After the loan documents are signed, the title company or closing agent will deliver them back to the lender for review. Once approved, the lender will wire the loan funds to the title company to officially fund and close your transaction.
*PRO TIP: Choosing to use a mortgage broker for your mortgage loan can dramatically reduce the amount of time it takes to close. Traditional banks and non-broker mortgage companies can take six to eight weeks.
Stewardship Mortgage has an average closing time of 21 days. We are also working on technology that will help us close some mortgage loans in 10 to 15 days.
Schedule an appointment below to talk with one of our Mortgage Advisors to learn about Stewardship Mortgage’s quick and comfortable process.