From application to approval to closing, obtaining a mortgage can take 30 to 60 days. However, some home purchases may take longer, depending on factors unique to the purchase transaction and the processing time of the mortgage loan. For most lenders, the mortgage loan process takes six to eight weeks. However, closing times can vary quite a bit from one lender and one type of loan to another.
Banks and credit unions usually take a little longer than mortgage companies. In addition, a high volume can alter delivery times. Closing a mortgage can take more than 60 days during busy months. The entire process of obtaining a mortgage loan comprises several processes.
These include getting pre-approved and appraising the home before obtaining the loan. Because of the many steps in this process, it is impossible to establish a defined time frame. In the typical market, it takes an average of 30 days to get a mortgage. Ellie Mae, in her latest report, states that all mortgage loans have an average of 49 days to close during the month of November.
If you focus on a maximum monthly payment rather than a maximum price for the purchase of a home, you can be sure that you have drawn up a budget that takes into account all current housing costs, not just principal and mortgage interest. You don't need to stay with the lender you turn to to get pre-approved when you get your final mortgage. There may be much better deals available than those advertised on the Internet, especially if you're a veteran who qualifies for the VA mortgage loan program. You can then go backwards using current mortgage interest rates to determine your maximum purchasing power.
If your credit is intact and you provide all the necessary documentation to the lender when submitting your loan application, the lender may be able to grant you a type of approval quickly, often within 72 hours. Most sellers and agents won't even consider an offer unless the buyer receives prior approval, because the seller needs solid proof that you qualify for a loan to buy the home. You can find this information in the closing statement that you will receive after the mortgage subscription ends. Whether you're buying a home or refinancing an existing mortgage, you'll also have to wait until the appraisal of the property in question is complete.
But just because you can submit a loan request just by pressing the “Return” key on your computer doesn't mean that your approval will arrive any faster. Generally, FHA loans require a credit score of at least 580; conventional and VA loans require a score of at least 620; and USDA loans require a credit score of 640 or more. Some borrowers choose an adjustable rate mortgage (ARM) if they plan to sell or refinance the home in the first few years. Ellie Mae reported that mortgage refinances took an average of 51 days to close and the purchase of loans an average of 47 days.
Randall Yates, executive director of The Lenders Network in Dallas, says that even the level of experience of a mortgage loan broker can affect how long it takes to approve your loan. Mortgage lenders look at a variety of things to determine if the borrower would be a good candidate for a mortgage loan. The first step in the mortgage lending process is to decide how much you can afford to pay for a home, then pre-approve the mortgage loan, find a home, choose a mortgage lender, and finally, apply for a mortgage loan.