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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: divanov/Shutterstock September 22, 2021 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. You might be ready to sign on the dotted line and move into a home tomorrow, but just like finding the right property, getting approved for a mortgage takes time. Here’s how long the process can take. How long does it take to get a mortgage
The average time to close a mortgage for a home purchase was 51 days as of June 2021, according to ICE Mortgage Technology. By comparison, closing a took 48 days. That doesn’t necessarily capture the entire timeline, though. Prior to getting approved for a mortgage, you’ll need to , explore loan options and get . A preapproval is a statement that a lender has conducted a preliminary review of your basic financial circumstances and is ready to loan you a certain amount. With some lenders that have an automated preapproval process, you can get preapproved in just a few seconds online. Others might take a day or two. Once you’re preapproved, you’ll submit an official loan application. That’s when the process might begin to inch toward that 51-day average. Why does the mortgage loan process take so long
Getting a mortgage requires an inside-out review of your finances, including all income sources and any assets and debt you have. This thorough evaluation takes time, and if any part of your financial life can’t be substantiated, that can create delays as your mortgage lender assesses your risk as a borrower. Similarly, if you have credit issues, you might have to step back from getting a mortgage altogether and take some time to improve your creditworthiness. Within the process, there are also other factors that can impact a lender’s ability to issue a final approval for a loan, explains Peter Boomer, a mortgage executive at , including: Waiting for outside parties to verify your income and employment status Waiting for the appraisal Still, not all mortgages take a long time to get to the finish line. “Some close in as few as seven [days],” says Hanna Pitz, senior policy advisor at the Mortgage Bankers Association. “It all depends on the complexity of the underwriting and the ability of the borrower to produce the right documents at the right time. The more straightforward the borrower’s financial life is, and the more it is documented online, the easier it is for the lender.” Steps in the mortgage loan process
If you’re just starting the , here’s a rundown of everything to expect. 1 Origination
The is the first step in buying a home (or refinancing a mortgage), when you’ll request a preapproval and then complete a formal application. Be ready to share documents about your financial situation with your mortgage lender, including W-2 forms from the past two years, recent pay stubs, recent statements from all of your banking and investment accounts and any other information that proves how much money you currently have and what you bring home on a regular basis. 2 Appraisal
Whether you’re buying a home or refinancing, your lender needs to know the value of the property because it’s the collateral for the loan. (If you default, your lender can sell the property to recoup its money.) As such, your lender will order an to determine the home’s worth. In this process, an appraiser visits the property and issues a formal report with an official estimate of its value. While the appraisal itself might not take more than an hour, the report can take a bit of time to be completed — longer than a week, in some cases. 3 Home inspection
Around the same time as someone is verifying the value of the property, you’ll hire a to identify any issues with the home — poor plumbing or bad electrical wiring, for example. This process can take a few hours, but longer if the property is bigger. In today’s market, some buyers are to get their offer accepted. While this might increase your odds of striking a deal, it also comes with the risk of not knowing any major pitfalls with the property you’re buying. 4 Title search
Your mortgage lender will also order a of public records to understand the transfer of ownership of the land and the property. This ensures that you have a , which means that no one else can claim that they have a stake of ownership in the property. If there are problems with the title — an unresolved property line dispute or a past tax lien, for example — this can add more time to the process while the issue is being remedied. 5 Underwriting
While others are evaluating the property, your mortgage lender’s underwriting department is busy evaluating your finances. The process is an in-depth review of your personal finances to gauge your risk as a borrower. The underwriter looks at your other debts, such as credit card balances, student loans or car loans, to understand how much money you have available to pay for those obligations, in addition to your new mortgage payment. The underwriter also examines your past credit history to identify any red flags such as late payments. If your finances are more complicated — perhaps you’re — underwriting can take a bit longer. If all goes well in underwriting, you’ll be conditionally approved for the loan. At this point — and if the appraisal and inspection don’t present issues — you’ll simply wait for the to finalize your new mortgage. 6 Closing
If you’re buying a home, the closing is the final step before the keys are officially yours. If nothing’s changed in your financial situation since you were conditionally approved, you’ll be deemed clear to close. The closing typically happens in-person with attorneys present, although there are some lenders that can do e-signings from a remote location. Regardless, you’ll sign a mountain of paperwork that makes you legally responsible for paying back the loan, as well as settle . This process can take as little as 30 minutes or up to a few hours. It’s important to be realistic about . It’s not all about you — if you’re buying a home, the seller might need additional time to move, for example. Look at the calendar and try to identify a date that feels comfortable for everyone involved. If you can set it at the end of the month, you might be able to avoid paying additional interest at closing, and time it well with ending a lease if you’re renting. When to begin the mortgage loan process
In addition to actually getting approved for your mortgage, there is another step to consider in your timeline if you’re buying a home: finding the right one and getting your offer accepted. The best way to think about beginning the mortgage loan process is understanding how long your preapproval lasts. Some lenders issue preapprovals that last for 90 days, but others have shorter time frames between 30 days and 60 days. Make sure you are leaving yourself ample time to browse properties. Additionally, consider whether you want to lock your mortgage rate. promise not to increase your rate even if the market changes and rates go up, but they also come with the need to hit your closing deadline before they expire. How to avoid delays or shorten the mortgage loan process
While some steps in getting a mortgage are out of your hands, you have some control over speeding up the process. “Borrowers can be their own allies here by keeping several factors in mind,” Boomer says: “Provide documentation early, [and] respond to lender requests as soon as possible. If you’re buying a home, make sure your Realtor is engaged with property comps.” Additionally, avoid any major financial moves once the loan process officially begins. “Avoid unnecessary or unexplained large deposits or withdrawals on bank accounts,” Pitz says. “Avoid unnecessary large purchases — particularly if they are financed. These are the types of activities that could affect your credit score or could require additional explanation and documentation during the review process. At worst, they could disqualify you.” Even if you do everything in your power to keep your mortgage loan process on track, there could still be bumps in the road to closing. In fact, according to data from the National Association of Realtors, 26 percent of mortgages are delayed. Those delays can be attributed to a range of factors, including issues with the appraisal, trouble securing financing, challenges with the title and more. If you’re concerned about meeting your closing timeline, Boomer recommends reaching out to the other key parties who want to see the transaction cross the finish line. “If time is running short on a closing date, borrowers should work with their lender to try to extend their interest rate lock and work with the seller to extend the date the sale will settle on,” Boomer says. Learn more
SHARE: Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC. Related Articles