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Closing a Mortgage: How Long Does It Take?

closing a mortgage

Buying a home can be an exciting endeavor for all, but one of the most common questions all potential home buyers ask when applying for a mortgage loan is; How long it takes to close a mortgage?

This process typically takes around 30 days. However, determining the precise duration of closing a mortgage is not that simple. 

Several factors come into play that influence the average time to close a mortgage. In this article, we will look at all those factors, and at the end of it, we will give you some valuable tips you can follow to speed up the closing process.

What is a mortgage

A mortgage is a loan that you can use to buy a house. You borrow the money from a bank or other lender and then pay the money back. A mortgage loan helps you finance or refinance the purchase of a house. The money you borrow is paid back over a few years in regular payments, which usually include interest. It takes up to six weeks or more to close the mortgage.

What are the steps required to get a home mortgage?

Knowing the steps involved in getting a mortgage can help determine the required time to close a mortgage.

1. Determine Your Budget 

Before applying for a mortgage, you must know how much you can afford to pay each month. Consider your expenses when deciding on a budget, including taxes, insurance, and other living costs. It’s also important to factor in any additional costs associated with the loan, such as closing costs.

2. Shop for a Mortgage 

When shopping for a mortgage, compare rates and terms from different lenders and get a prequalification from each lender. Prequalifications are rough estimates of how much loan you are qualified for.

Make sure you understand all of the fees involved with each option. Working with an experienced mortgage broker or loan officer can help you find the best loan.  

3. Gather Documentation 

Once you’ve chosen a lender and loan, the next step is collecting all the documents needed to apply for the mortgage. This may include pay stubs, bank statements, and other financial documents. The lender will use this documentation to verify your income, assets, and creditworthiness.

4. Submit the Application 

After submitting the required documents, the loan officer will review your application and check if you meet their lending requirements. This process may take several days or even weeks. 

5. Approval Process 

Once your loan is approved, the lender will order a home appraisal to determine the current value of the property. They may also require a home inspection to verify that there are no structural or safety issues with the house. 

6. Closing 

Once all parties involved in the transaction have reviewed and approved all documents, you can move forward with the closing process. Generally, closing a  mortgage takes four to six weeks. However, this time span can vary depending on the lender and type of loan. 

Working with an experienced mortgage broker or loan officer can help speed up the process. These professionals have access to multiple lenders and can provide more personalized service throughout your mortgage transaction.

Factors that impact the time to close a mortgage  

Type of Loan

One of the key factors that can impact how long it takes to close a mortgage is the type of loan and lender you choose. Different lenders have different requirements for processing and underwriting times, as well as other conditions that may influence the time to close. 

1. Conventional Loan

2. FHA Loan 

3. VA Loan 

4. USDA Home Loans 

5. Adjustable-Rate Mortgages (ARMs) 

6. Jumbo Loans: 

7. Balloon Mortgage 

8. Home Equity Line of Credit (HELOC)

Credit score 

The borrower’s credit score is another important factor. Borrowers with higher credit scores may be able to close their mortgages faster than those with lower scores. 

Down payment

The down payment amount and source can also influence the time it takes for a mortgage to close. Generally, larger down payments can help speed up the process since lenders may view them as more secure investments.   

Documentation

Finally, the documentation needed to process a mortgage can also affect the time it takes to close. Borrowers who can provide all required documents promptly will typically be able to close their mortgages faster than those who take longer to submit all paperwork.

Average Time Frame for Closing a Mortgage

Although the exact time frame for closing a mortgage can vary, it typically takes four to six weeks from submitting your application until the loan is finalized. 

Working with an experienced and knowledgeable mortgage broker or loan officer can help speed up this process by helping you navigate the necessary steps more efficiently.

Ultimately, the time to close a mortgage depends on many factors and can vary from one borrower to another. To make sure that you close your mortgage on time, it’s important to be prepared with all the necessary documentation and work closely with your lender throughout the process.

Tips for Speeding Up the Process

As promised at the beginning of the article, here are some quick tips you can follow and save a lot of valuable time.

  • Work with an experienced mortgage broker or loan officer.
  • Choose a lender who has favorable requirements. 
  • Maintain a good credit score 
  • Have a larger down payment 
  • Submit all documents on time 
  • Understand the type of loan you are applying for 
  • Check your credit report regularly.
  • Get preapproved before house shopping. 

Benefits of Working with an Experienced Mortgage Broker or Loan Officer

Working with an experienced mortgage broker or loan officer can provide numerous benefits for first-time and experienced home-buyers. 

These professionals have a deep knowledge of the mortgage industry and are familiar with different types of loans, lenders, and requirements.

They can also provide personalized service throughout the mortgage transaction process, which is beneficial for borrowers who may have questions or need help.

Additionally, they can provide valuable insights about available loan programs and lenders that may offer faster processing times and more favorable terms. 

Working with an experienced mortgage broker or loan officer can make closing a mortgage much easier and more efficient.

What type of mortgage loan is best for you?

When it comes to selecting the best type of mortgage loan for you, there are a few factors to consider. First, look at your current financial situation and determine what type of loan best fits your budget. Also, consider the type of home you’re purchasing, as different loan types have different eligibility requirements. Before selecting a mortgage lender, compare loan terms and offers from multiple lenders to ensure you get the best deal.

FHA 

An FHA loan (Federal Housing Administration) is a type of mortgage loan insured by the US government. It is designed to help home buyers with lower incomes and credit scores obtain financing for their home purchases. 

FHA loans allow borrowers to purchase homes with as little as a 3.5% down payment, and they also come with easier qualification requirements than conventional loans. 

Conventional loan

A conventional loan is a mortgage not guaranteed or insured by the government. It is typically offered through a private lender or bank. Conventional loans generally have faster processing and underwriting times than government-backed loans, making them a good option for borrowers who want to close their loans quickly.

VA Loan

A VA loan (Department of Veterans Affairs) is a type of mortgage loan designed to be used by veterans and active-duty service members. It is guaranteed by the US government and is typically available only through approved lenders. This loan provides attractive financing options for home buyers with certain military qualifications, including no down payment and lower interest rates. 

It is important to note that borrowers must provide a Certificate of Eligibility to prove their eligibility for the VA loan program.

USDA Home Loans

USDA Home Loans, called Rural Development loans, are mortgage loans backed by the US Department of Agriculture. These loans were created to help those in rural areas; finance the purchase of their home and are designed for low- and moderate-income borrowers who may have difficulty getting traditional financing. USDA Home Loans are available with no down payment and offer flexible credit requirements.

Final Thoughts

Navigating the world of mortgages can be daunting, but understanding a few key factors will help make the process much smoother. Be sure to provide all required documents in a timely manner, understand the type of loan you’re applying for, and choose a lender that you feel comfortable working with. 

Following these tips should help speed up your mortgage closing process so you can move into your new home as soon as possible. Do you have any other tips for speeding up the mortgage closing process? Share it with us in the comment section below!

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Last modified: January 10, 2023

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