All in Good Time: Mortgage Closing is Never Lightning-Quick
As a prospective homeowner, you have assessed your finances, weighed all the pros and cons of buying a house, and gone through mortgage pre-qualification. Everything speaks in your favor. You don’t want to lose a single day and crave to become a title holder here and now. But hold your horses!
If you consult federal law (namely the CFPB-governed TILA/RESPA rules), you will learn that it can't happen overnight. There is a mandatory waiting period of seven business days between starting the procedure and closing a mortgage deal. But in real life, a person can’t complete all the necessary steps in a week, even if the law allows it.
Let’s find out how long it actually takes to close a mortgage.
Mortgage Closing Timeline Dissected
If you have cash to pay for the mortgage and are ready to waive contingencies, you may fit into the seven days mentioned above. But let’s face it. Fewer than 29% of Americans buy their home with all cash. And waiving contingencies is fraught with serious risks: losing your earnest money deposit, covering an appraisal gap, and incurring other out-of-pocket expenses.
So, don't rush it. If we talk about a regular mortgage-closing routine, you can't expect to throw a housewarming party sooner than a month after your purchase offer is accepted. And that is very fast. Typically, count on 30 to 45 days, with 37 days being the golden mean. How come it takes that long? Here's a breakdown of the steps and their estimated duration.
Step 1. Application (1 day)
The countdown starts when you and the seller agree on the terms. After you and the seller sign the purchase agreement (with the price, deposit amount, and closing date indicated), you can kick off the application procedure. Being pre-approved by the lender accelerates the process a little, as the agency can use the pre-approval information later.
Step 2. Home inspection (7-14 days)
The inspection itself takes just a couple of hours, but the local inspector's availability may cause a couple of weeks of delay. As soon as the official gets to the property, they will check the house from top to bottom (that is, from the roof to the plumbing). If everything is in apple-pie order, you can proceed to step three. If problems are found, you can demand repairs, negotiate price cuts, or even abandon the deal. Anyway, property flaws will significantly delay mortgage closing.
Step 3. Appraisal (7 days)
Here nothing depends on you. It is up to the lender to see this phase through. The agency confirms the property’s market value to make sure they loan you the exact sum you need to buy it. The lender considers the home's square footage, age, location, number of rooms, property upgrades, and more. Again, the very procedure is rather brief, but scheduling and preparing closing documents can cause possible delays.
Step 4. Title search (1 day)
The lender ensures the seller is the legal owner of the property and the house is free of liens or other ownership issues. If those are detected, another delay is imminent.
Step 5. Mortgage approval (5-20 days)
You do nothing here but sit and wait while the lender performs underwriting, that is, reviews the borrower's finances (factoring in income, debts, assets, and credit history) to prove solvency. If everything is fine, the lender gives the green light to clear the close.
Step 6. Signing closing disclosure (3 days)
Why do you need three days to put a signature under a document? First of all, more haste, less speed. You should read it carefully before committing yourself, and consult an attorney if you have any questions or notice discrepancies in loan terms, closing costs, or other aspects. Second, the three days are stipulated by law before closing. After you sign, you pay the closing funds (typically via cashier's check or wire transfer).
Step 7. The final walk-through (1 day)
Buyers ensure the property is in the condition they agreed upon (especially if some repairs were requested) and has suffered no new damage. The walk-through usually occurs a day or two before closing.
Step 8. The closing per se (1 day)
This is the day you have been longing for, experiencing anxiety, stress, and anticipation. You sign the remaining paperwork, pay taxes and insurance, get the keys, and become the happy homeowner.
Mind you, all numbers in parentheses are ballpark estimates and can vary depending on the loan type, third-party schedules, and other factors. For a more precise timeline, consult seasoned specialists in the field.
How LBC Mortgage Can Help You
Our lending agency has provided loans of various kinds across the USA for over 18 years, so we know the procedure of closing on mortgages front to back. Moreover, we understand that the closing period duration can't be predicted and is calculated for each use case individually. If you want to apply for a mortgage and discover how long the red tape will take, our high-profile mortgage professionals will consult you on the nitty-gritty of the process and recommend ways to streamline and facilitate it.
Contact LBC Mortgage for detailed information and qualified advice in the mortgage domain.
Mortgage Closing Duration in a Nutshell
To close on a mortgage, you should file an application, schedule a home inspection, go through appraisal, underwriting, and title search, get approval, sign the closing disclosure, do the walk-through, and finalize the deal. On average, it takes 30 to 45 days.
To discover the exact timeline for your unique situation, consult vetted experts in the field.