How long does it take to get a mortgage? We get this question all the time – and for a good reason! It's different everywhere, and differences can be found based on which lender you choose, the housing market, and your personal actions and timeline. In a typical housing market, getting a home loan takes, on average, about 30 days. This average is based on all lenders, including banks, credit unions, and private mortgage lenders. However, if you know how to prepare and where to go, you can get a mortgage in much less time. In fact, Ruoff's average is only 17 days from putting in an application to closing on your home.
The Home Mortgage Timeline
The length of time between each step can vary, but here is a basic mortgage lending process timeline. Note that some steps are done simultaneously!
Get Pre-Approved As soon as you put in a pre-approval application (a simplified and less specific version of your full application), your loan officer will get to work. They will run a credit check, verify your income, and review your goals. Then, they'll come back with an estimate for how much you could be approved for a loan. This process can take a couple of days (if all goes perfectly) up to a week or more. If an issue comes up with your credit check or financial situation, you could be waiting a bit longer.
The benefit of getting pre-approved before choosing a house is two-fold: you know your budget ahead of time, and you're cutting time out of the full application process by providing most of the needed information early.
Find Your Home Once you are pre-approved; you can start looking at houses to purchase more seriously. This part of the process is entirely based on you, your preferences, and the availability of homes on the market. For example, you could find a house in one day or have already had a place in mind before you got pre-approved. Or, you could be looking for months. Once you've made an offer, and it's been accepted, you can move onto the next step.
Get an Appraisal Your dream home needs to be looked at by an official appraiser before purchasing the home. The appraiser decides exactly how much a home is worth based on location, other homes in the area, and the home's condition. The appraisal is ordered by your lender and ensures that the house is not being drastically over-priced.
Fill Out a Full Application Now that you've found the home of your dreams, it's time to buy it! Your loan officer will need a bit more information from you to fully ensure you can get a mortgage for this house. If you got pre-approved, this part of the process would likely be much shorter (barring any major unseen obstacles!). This is also the part of the process that is often slowed down by the borrower. Your application can only be reviewed once every piece of paperwork requested is provided. The sooner you gather the documents your loan officer needs, the faster this step goes!
Enter Underwriting After your full application is completed, it's sent to underwriters. This is the part of the process that is often different amongst lenders. Some lenders, particularly very small ones or very large ones, can take some extra time with this due to their underwriters being outsourced or off-site. At Ruoff, our underwriters are in-house, which means their response times are much faster. During underwriting, your financial situation will be reviewed. This involves verifying you are financially secure enough to repay a loan. It can also include checking on information with third parties like your bank, your employer, etc. This step of the process can take several days or weeks, depending on the individuals the underwriters need to speak to.
Close on Your Home When the underwriter approves your loan, you are what we call "clear to close." Now, all that's left is to set a date to sign the final paperwork and get the keys to your home! This is usually scheduled as soon as underwriting approves your application and shouldn't be more than a few days out – unless other stipulations were made during the sale. For example, some home sellers need to stay in their home for a little extra time, so your closing may be pushed back.
And, just like that, you're a new homeowner.
Some More Tips
Plan ahead when it's time to buy a house! You should research mortgage lenders to find one with reasonable interest rates, but don't stop there! Make sure that you're comfortable with the lender, too. It would be best to choose a lender and loan officer you trust and can communicate with easily. Also, check to see if your lender provides online services for uploading documents securely, as this can shorten the mortgage process extensively.