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How long does it take to secure a mortgage?

This is probably one of the most common questions we get asked.

Buying a home is a goal for millions of families. Unfortunately, many aren’t aware of the process and procedures they must follow when making their home-owning dreams a reality. 

Many first-time homebuyers know little about the process they must follow to complete their home purchase, how long it will take, and what they can do to ensure securing a mortgage that is a good fit for their goals. 

The reality is that buying a home is a unique experience for each individual family, and there are not many hard-and-fast rules that apply in every case.

Read on to learn about the general strategies and best practices that you can use to help secure the perfect mortgage quickly and efficiently.

Mortgage Timelines

While mortgage timelines are bound to vary for individual borrowers, the average amount of time it takes to close a mortgage, including the entire pre-approval and approval process, is approximately 51 days. This average timeline does vary depending on the specific mortgage market, with low-volume markets generally taking less time to close a mortgage. 

The amount of time it takes to close a mortgage will also depend on the borrower’s organization of required documentation, and the response time of the bank they are working with. Your choice of bank or lender can impact the amount of time required to secure a mortgage because some banks are slower to process paperwork and get back to borrowers. 

Lenders’ response time can also vary depending on the kind of mortgage you are applying for. Some lenders, for example, might take a longer amount of time to review the required documents and issue an approval or rejection decision for jumbo loans than for conforming loans. 

Jumbo loans are loans that are above the conforming loan limit of their region. Since jumbo loans don’t benefit from the same sorts of protections that conforming loans do, they often represent a greater risk of lenders and stricter approval requirements for borrowers. That’s why it can sometimes take more time for banks and lenders to approve mortgages for jumbo loans. 

Despite these challenges, it is not uncommon for qualified, organized borrowers to complete the entire process of getting a mortgage in 30 days or less. 

A top mortgage brokerage like ASTAR Home Capital can accelerate this process and make it much easier and less stressful for you.

Email info@astarteam.com or call 888-ASTAR-11 (888-278-2711) to start the loan application process today!

Pre-approval and Approval

The first step for borrowers to get a mortgage is to realistically set goals for themselves in terms of what size of home loan they wish to secure, their target interest rate, and a down payment that would make sense. This goal-setting process should not be done in a vacuum, and should instead be in line with borrowers’ research into the mortgage market in their area as well as their own financial situation. Borrowers should consider their own debt-to-income ratio, credit score, and existing assets so that they can set realistic goals about their target mortgage. 

Next, you can work to get pre-qualified for home loans from a lender of your choice. For some lenders, the pre-qualification process will be automated, simply requiring you to fill out forms online. For other lenders, it will be necessary to speak to a representative by phone or in person. 

The benefit of getting pre-qualified for a home loan is that it validates that your target mortgage makes sense in the eyes of lenders and their risk assessment. Even after considering your income, credit score, and assets, it’s best not to make any assumptions about what sort of home loan you will qualify for. 

Next, you’ll want to get pre-approved for your home loan. Pre-approval is a more in-depth process than getting pre-qualified for a loan and it will require you to get your finances in order and submit documentation that supports your application for the loan. 

You will need proof of income such as a W9 or Profit and Loss statement. You will also need to provide bank statements for the bank account you’ll be using to qualify for the mortgage, as well as from retirement and brokerage accounts. 

You should have documents that verify your past 12 months of rent payments and past bankruptcies or foreclosures. The amount of time it takes for you to gather, organize, and submit these documents to your lender will affect how long it takes to receive pre-approval. Getting pre-approved is beneficial because it indicates to potential sellers that you’ll be able to secure funding when purchasing a home. 

Pre-approval allows you to shop with confidence and gives you leverage when negotiating with sellers. 

Getting Full Approval

After getting pre-approved and deciding on a property, the next step in the process is to get full approval for your home loan. In many cases, an appraisal of the home you’re buying must be conducted, and documentation of the appraisal must be provided to the lender. The appraisal, along with a home inspection, ensures that the value of the property is in line with market prices. 

Your mortgage lender will then conduct a title search of the property, to make sure that no other party holds an ownership stake in the home. Lenders will also undergo an underwriting process, in which the documentation you’ve provided will be reviewed and verified. 

Finally, all parties must come together for the closing of the sale, including the buyer, seller, attorneys, brokers, and bank representatives. At the closing, each party signs relevant paperwork to document the sale of the property, and closing fees are paid by buyers and sellers. 

On average, the amount of time it takes to complete all of these various processes is around 40-50 days. However, the timeline will vary substantially depending on your lender. In our case, for example, the mortgage procurement process can often be accomplished in two to three weeks. 

How to Accelerate Mortgage Approval

To decrease the amount of time it takes you to secure a mortgage, you should always make sure to gather and organize required documents beforehand and provide them to your lender early. You should also make sure to be responsive and prompt in communicating with your lender, especially if they should request additional documents. 

You should be cautious about making large withdrawals from your bank account after getting pre-approved for a mortgage. Lenders will sometimes see excessively large withdrawals as a red flag and might sometimes revoke your pre-approval status. 

In conclusion, to make getting a mortgage quick and efficient, make sure to choose your lender carefully, get organized early, reach out to key stakeholders like sellers and bank reps frequently, and be prompt with communications. 

Following these steps will make the process of landing your dream home fast and painless.