In the age of same-day delivery and smartphones, we’re used to rapid wish fulfillment. With a few clicks and taps, and within hours, a drone drops a package on your porch. But when it comes to getting a mortgage, that’s just not how things work. So how long does it take to get a mortgage? Probably longer than you think.
“Today’s mortgage process is very involved, particularly with regard to the documentation required, third-party verifications, and the independent appraisal process,” says Whitney Fite, president of Angel Oak Home Loans, in Atlanta. “All of these moving parts can cause a delay in processing if an issue arises.”
The entire mortgage process has several parts, including getting pre-approved, getting the home appraised, and getting the actual loan. In a normal market, this process takes about 30 days on average, says Fite. During high-volume months, it can take longer—an average of 45 to 60 days, depending on the lender. If the lender uncovers any financial issues in your record (e.g., a low credit score, previous foreclosure, or overwhelming debt), getting a mortgage can become a slower and more complicated process.
Don’t wait until you’ve found the perfect home in order to start the mortgage process. The time to start is as soon as you start thinking you might want to buy a property.
Many sellers will require that buyers get pre-approved for a mortgage before they will accept an offer. This involves the lender checking your credit rating, debt-to-income ratio, and other financial information. Depending on your circumstances (self-employed, temporary visa, previous bankruptcy, etc.), this can take anywhere from one week to several months. Once you're approved, the lender will provide a letter stating the amount of money you're approved for, then you can get to home shopping.
Before you even begin the pre-approval process, however, you’ll also need to take time to compare mortgage rates and find the right lender for you. Different lenders offer different terms and interest. You can search for mortgages with banks, nonbank lenders (e.g., Quicken Loans), or mortgage brokers. How long this takes will vary depending on how thorough and efficient you are in your search.
OK, you make an offer, it’s accepted, and you’re ready to move in, right? Not so fast. Even though you’ve been pre-approved for a mortgage, there are still a few steps remaining.
You still have to apply for the actual mortgage loan and make it through the appraisal process. Keep in mind that the lender you get your loan from doesn't have to be the same one that pre-approved you. Also, the time it takes to get an appraisal will vary depending on how quickly you can get an appointment with an appraiser.
There’s also the underwriting process, during which an underwriter will review all of your financial information and make sure you haven’t made any false or misleading claims on your application. Then it’s off to the closing itself, when you’ll get the final loan.
Unfortunately, there might still be bottlenecks along the way. According to Fite, common issues include delays in appraisals, tax transcript verifications from the IRS, and employers returning verifications of employment. The No. 1 cause of delay, however, is one you can prevent—the borrower not turning in documents in a timely fashion.
“The best advice I can give someone buying a home is to prepare to respond very quickly for any and all documentation requests,” Fite says.
So what if your mortgage isn’t ready by the time closing comes around? The closing date might need to be moved back, says John Lyons, a Realtor® and broker in Chicago.
“If this happens, it's likely the borrower will incur extension fees,” he says.
In sum, there’s no set length of time it takes to get a mortgage. It depends on a number of factors, including your circumstances, having all your financial documents in order, and a little bit of luck. So, if you’re thinking of buying a home any time soon, the sooner you start the process, the better.
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