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How long does the loan process take?
The length of time between when you apply for a mortgage and when you get the funds for your home can vary widely depending on many factors.
For purchases, generally sales contracts are written with a closing date set about 30 days out. Most purchase loans can be completed in 30 days. Often, if all of you numbers are good, such as credit score, debt-to-income, loan-to-value, etc., purchase loans can be completed much faster. Conversely, if your numbers and documentation are not so good, these loans can take longer.
There are unforeseen problems that can arise with purchase transactions and delay the process. If the home inspector finds problems with the property that is being purchased the lender may require the repairs to be made before the loan can close. the appraisal can also come under review by the lender and have to be adjusted by the appraiser to deal with certain objections the lender may have with the appraisal.
Refinance transactions can typically close faster than a purchase transaction. In a purchase transaction you must deal with the buyer and seller and their agents and the involved parties. In a refinance transaction it is you, your broker, lender, closing agent and appraiser.
There is definitely no set time-line as to how long purchase transactions and refinance transactions take from start to finish. However, refinance transactions are normally, considerably quicker than purchase transaction. There are many different variables that go into how long a loan takes to close. Refinances can be done in ideal situation as quickly as a couple of days but normally take anywhere from 10-14 days on average. Purchase transactions again can sometimes be done very quickly, however 30 days is the normal time of a purchase due to the sales contract.
In cases where the subject property of the purchase or refinance transaction is a cooperative, the financing process can take significantly longer. Lending banks require that the coop management and coop board to provide certain signed documents prior to settlement. Depending on the efficiency of the coop management, this extra step can add weeks to the mortgage process.
If you are refinancing rather than purchasing do not forget the Right of Rescission period. This is a federally mandated three day waiting period between the time your refinance closes and when it actually funds.
The loan process will be greatly affected by the experience of your mortgage broker.
» DISCLAIMER: The information contained in this article on 'How long does the loan process take?' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.
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