The decision to buy a home is an exciting step in someone’s life, but for many buyers, understanding the loan process can be intimidating.
And there is one simple question that most people ask. “How long is the loan process when buying a house?”
In the following paragraphs, we will break down the timeline and steps involved in obtaining a home loan.
Pre-approval: The Crucial First Step
Before diving into the home search, it’s important to get pre-approved for a mortgage.
This involves providing your financial information to a lender, who will assess your creditworthiness and determine the loan amount you qualify for. Pre-approval typically takes 3 to 5 days and is valid for 60 to 90 days.
House Hunting: Finding Your Dream Home
With pre-approval in hand, it’s time to find a Real Estate Agent to work with.
When searching for a Real Estate Agent you want to make sure you are working with someone that you feel comfortable with. A few things to consider.
Does the Real Estate Agent respond on time? Keep in mind that Real Estate Agents do have a life but you want to make sure that the response time is within a few hours or 1 business day.
Is the Real Estate Agent helpful in meeting your Real Estate needs?
Does the Real Estate Agent listen to your needs and what you want when you are searching for your home? These are a few things to consider when you hire your Real Estate Agent
When you are working with a Realtor, the Realtor might want you to sign a Buyer’s Representative Agreement. Most times, a Real Estate Agent wants to make sure that you are a serious buyer and will typically want you to work exclusively with them. It is possible that the Real Estate Agent will ask you to sign one.
On average, house hunting takes 1 to 3 months. Keep in mind that a competitive market might require more time and multiple offers before securing a property.
This stage varies in duration, depending on your preferences and the local housing market.
Mortgage Application: Officially Starting the Loan Process
Once you have placed an offer on a home and your offer has been accepted, it’s now time to work with your lender.
If you were able to turn all documents in upfront you should already have an approval from your lender.
If for some reason you only received a Pre-Approval, you will have a checklist from your lender telling you all of the things that they need.
This step involves submitting extensive documentation, including tax returns, pay stubs, bank statements, and other financial records.
Your lender will then package everything up and submit this information to the there processor for review. Once it goes to the processor it will then be submitted to the underwriter.
Loan Underwriting: An In-depth Evaluation
The underwriting phase is when your lender thoroughly reviews your application, assesses risk, and verifies your financial information.
This process can take anywhere from 2 to 4 weeks, depending on the lender’s workload and the complexity of your application. Underwriters might request additional documentation or clarification during this stage, so be prepared to respond promptly.
Getting A Home Inspection In Your Option Period
Typically while you are working on your loan with your lender you will also be working with a licensed inspector to inspect the property while you are in your option period.
The option period is negotiable between you and the Seller. This can typically be between 5 to 7 days on average. If you negotiate more days then that is great!
You want to check the property thoroughly for possible needed repairs and make sure the major things are functioning properly such as the a/c unit and heating unit, water heater, plumbing, roof, and foundation.
If for some reason you choose to negotiate with the Sellers to fixing up certain items you will need to do this within your option period.
Appraisal: Assessing the Property’s Value
Before approving your loan, the lender will require a professional appraisal to confirm the home’s value.
This ensures that the property serves as sufficient collateral for the mortgage.
The Appraisal could typically take up to 1 to 2 weeks so it’s important to make sure that you have negotiated your repairs during your option period before ordering the Appraisal.
If you order Appraisal before negotiating the repairs and decide you want to relay your option to cancel due to the Seller not wanting to make repairs you could get hit with an Appraisal fee.
This is why it is important to know whether or not the Seller will make the requested repairs.
If the seller does not possess an existing survey and you indicated in the Real Estate Contract that you would obtain a new survey at the buyer’s expense, a survey will be requested during this period.
You may receive a copy of the survey via email for your examination, and the official survey will be provided to you during the closing.
Closing: Finalizing the Deal
After loan approval, you’ll proceed to close at the title company, where all parties involved in the transaction come together at the title company to sign documents, transfer funds, and finalize the deal.
This stage usually takes place once the lender docs have been sent to the title company.
Once the title company has lender docs, the escrow agent will call all parties to schedule the closing.
If for some reason you are unable to go to closing the title company might be able to do a mobile closing. Every title company is different so this is something you want to ask them.
Make sure that you review the title commitment a few weeks before closing. This should spell out any possible liens on the property and give you information about the property.
Make sure you make yourself aware of any contingencies or conditions that could cause a delay in your closing.
Conclusion:
Understanding the various stages of the home loan process is crucial for a smooth and successful homebuying experience.
While the loan process when buying a house may vary, it typically takes 30 to 45 days from the mortgage application to closing. By being proactive, organized, and responsive, you can help expedite the process and minimize any potential delays.
Please don’t hesitate to get in touch with me if you have any further questions about understanding the home-buying process.
I’m here to help you every step of the way from beginning to the end I will be there every step of the way.
Remember, if you need a Realtor to help you thru the home buying process or the home selling process contact me today!