How Long Is The Mortgage Process?
So you are ready to make the transition from being a renter to a homeowner? Whether your goal is to find a little place in the city or some acreage in the country, you’d probably prefer to officially graduate from renter to homeowner sooner rather than later. After all, by purchasing a home rather than renting one, at least some of that money you’re paying is going into the equity of your new home and ultimately into your net worth.
The reality of the mortgage process timeline is that it can depend. Factors such as if this is your first time purchasing a home or how many homes you already own can influence the progression.
But since you are here at this article about the length of the mortgage process, we’re going to assume that this is your first home rodeo. Our goal is to give you a good idea of how long it will take to purchase your new home.
Estimating a Traditional Mortgage Timeline
The traditional number for a mortgage is at least 30-45 days. This range is pretty typical as time is needed for underwriting, title research, legal requirements, and other aspects of the process. The process can be broken down into about six major steps:
- The Pre-Approval Process (1-2 Days). Long ago, in a galaxy far, far away… Actually, a number of years ago now, mortgages did not require pre-approval. Part of the problem was the lack of technology, but the other aspect was simply it was how it had always been done. Times have changed, and obtaining a mortgage pre-approval is a good way to confirm your budget and let any seller know that you’re entirely serious about purchasing a home.
You will work with your chosen mortgage broker or lender and go over the basics like your income, liabilities, and net worth. They’ll crunch some numbers and work out what they believe you can afford. If your mortgage broker is truly top notch, they’ll begin to gather documentation for this information to speed the process up down the road. And, if your lender is really good, this process may only take a couple hours. As you can see, the pre-approval part should not be one of the more time-intensive aspects of a mortgage. - The Home Search (Days to Months). An increasingly common hitch in the mortgage process is the time that it takes to find your desired home. It’s a good idea to start with a list of what you want and what you need. Visit neighborhoods, ride the roads, and find the property that you want to buy and your mortgage pre-approval says you can afford.
While your mortgage broker cannot do a whole lot to speed up this part of the process since it’s ultimately your search, quick communication can get the ball rolling when you’ve located the one. Work with a real estate agent to help cut through the uncertainty of the home search process, and let them find options you might not otherwise know about. Don’t assume that every home is listed on the large real estate website. - Make An Offer (1-3 Days). This is where working with a real estate agent can again help you cut to the chase, but this is where you formulate your best offer for the home. Keep in mind that in a seller’s market, you’ll likely be competitive with other buyers, while a buyers market might provide you with a bit more wiggle room in negotiations.
Actually drafting the letter may take almost no time or may involve an entire day. It depends upon what earnest money you are willing to provide, contingencies, and other details. Don’t forget to place a deadline on the offer so you’re not stuck up in the air for too long while you lose out on other opportunities. - Seller Acceptance or Counter Offer (1-2 Days). Time can quickly rack up here, but at this point the seller may need a little time to consider your offer. It will largely depend upon the presence of a deadline and other factors, but ideally the seller should be getting back to you in a timely manner. The timeline will grow a little if the seller counters your offer and you have to consider paying a little more or possibly dealing with something like a more complex contingency. Longer negotiations are not uncommon, so this goes back to making the best offer up front.
Once you and the seller have agreed to the terms, you now have a contract. - The Mortgage Application Process (15 to 30 Days). The mortgage application process kicks off once you have the contract. This period is referred to often as the contract to close time. You will need to schedule an inspection of the new home and begin and complete the mortgage underwriting process. You can expect an inspection to take only a few hours (generally 3-4), but it could take longer and will often take a week or so to schedule. The broker or lender will provide you with a loan estimate, and you’ll begin to document everything that needs to be documented.
The good news is that inspections and underwriting can generally coexist. You’ll need to get the inspection and appraisal scheduled as quickly as you are able, though, since your lender will need to consider the LTV (loan-to-value) ratio of the home. The inspection will confirm that there are no major issues with the home that may influence its value.
Working with the proper mortgage broker is absolutely critical at this juncture. The right mortgage broker can significantly speed up the process. Waiting on a traditional lender to complete its process will likely take longer. This is why it is important to do your homework when selecting a mortgage broker or lender. - Closing Time (3 Days). Closing is the climax of the home buying plot. At the end of the day, when you close on the home, it’s now your home. The mortgage application process is the pipeline to this event, and it will take input from your mortgage broker, real estate agent, real estate attorney, and title company. If everyone has done their work, then this day will come sooner rather than later.
Selecting the right mortgage broker is a critical component in making your mortgage process quicker than the average. Range Lending is known for a 15-day clear to close process. This means that Range Lending is among the best when it comes to exceptional speed. The combined experience and service of Range Lending will give you the best shot at getting in your first home in record time. Contact us today to get started!
