You’ve found the perfect home, with the best imaginable location, layout, size, finishes, and price. You’re ready to buy, but there’s one problem: you haven’t started the mortgage process, and the seller will only accept offers from pre-approved buyers. Unfortunately, you won’t be able to make that happen by tomorrow.
How long it takes to get a mortgage will vary. In most cases, a buyer’s mortgage can be closed within 30-45 days of application, depending on how quickly you move through the steps. Banks are required to ask for many documents these days, so don’t assume the entire mortgage loan process will be speedy.
Even getting a pre-approval on a loan doesn’t happen overnight. There are key procedures that must be considered. Wondering, “How long does it take to get a mortgage?” Let’s take a look.
Comparison Shopping For Loans
It’s unlikely you would buy a car, piece of furniture, or appliance without shopping around. You definitely shouldn’t take on the mortgage loan process without some serious research.
Search for mortgage providers online, and visit a local community bank. Schedule a meeting with a mortgage loan officer, who will pull your credit and give you a reasonable estimate of the interest rate, closing costs and terms you can expect. Then expand your search to other community banks and compare the terms you’re offered from each bank.
Helpful tip: When comparing lenders, pay attention to the annual percentage rate (APR), not just the interest rate. The APR covers the “total cost” of borrowing, including loan origination fees and other ancillary costs.
Total Time: 14 days.
Get A Pre-Qualification Letter
Most buyers will require your pre-qualification letter before they’ll even consider your offer — but don’t worry, this step is quick and easy.
Ask any of the lenders you are working with for a pre-qualification letter. These are relatively easy to get and simply give a rough, unverified estimate of the loan size you may qualify to receive. Most lenders will give you a pre-qualification based on your verbal self-reporting of your income, assets, debts, and down payment size.
Helpful tip: You don’t need to take out a loan from the same lender that gave you your pre-qualification letter.
Total Time: one to three days
Get Pre-Approved
When considering how long it takes to get a mortgage, be aware of the difference between pre-approval and final approval. The pre-approval stage is when lenders verify everything you’ve told them. You’ll need to supply identification documents such as your Social Security card, proof of income, assets, and employment, as well as records of any debts you hold. The lender will pull a credit report.
If you have a simple situation, such as stable employment with no debt, this process can be as short as one to two weeks. If you’re self-employed, own several other houses, have had a previous divorce or bankruptcy, have a pending court case or lawsuit against you, are in the U.S. on a temporary visa, or have other complicating factors, the loan officer may require additional documentation, which can extend this part of the mortgage loan process several weeks or months.
Total Time: one week to several months
Final Loan Approval
Armed with your pre-qualification letter, you make an offer on your dream home and it’s accepted. The lender will need to give you what’s called the “Loan Estimate.” This outlines the loan type, terms and estimated cost of the loan. Once the Loan Estimate has been delivered to you, the lender can take a deposit from you for the appraisal and third party fees that will be incurred. Next, you’ll need the lender to conduct an appraisal.
In this instance, an appraisal is official verification that you’re buying the home at a reasonable market value. It protects the lender from the risk of loaning an unreasonable sum, such as $300,000 on a house that should be valued at $220,000.
Scheduling a time for a licensed appraiser to visit the property is frequently the longest part, and may take up to two weeks. Once the appraiser makes a home visit, the approval (or rejection) comes through within a day or two.
Time: three days to two or more weeks
Now that you’ve passed the appraisal process, the lender will need about a week to do the final underwriting on this loan. Now at least 3 to 7 business days before the actual closing the lender must deliver to you the “Closing Disclosure.” Once you’re happy with the final numbers, you’re ready to close on this loan — and this house. Enjoy the moment, before you have to start packing.
Hopefully your questions about how long does it take to get a mortgage have been answered by now. As you can see, the time it takes to get a mortgage will vary depending on many factors, so the sooner you start the mortgage loan process, the better.
