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Key Points:
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The mortgage process takes at least a month, but usually closer to 60 days.
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You can speed up the process by gathering financial documentation before applying.
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If you’re ever confused about what step you’re on or how much longer to expect, talk to your loan officer.
We’ll look at the mortgage process and give you an idea of how long it generally takes so you can approach the home-buying process as an informed, prepared buyer.
The more work you do ahead of time, the more time you’ll save down the road.
How Long is the Mortgage Process?
No personal financial transaction takes as long as the home-buying process. Walk into a dealership with a backpack full of cash to buy a car? You might get some strange looks, but you'll be behind the wheel in a matter of hours (if not minutes). Same for nearly every other major transaction – if you've got the money, you'll have whatever you're buying in hand quickly.
But that isn’t the case when buying a home. Even when fully prepared to buy with cash, you’re looking at weeks before moving in, if not a month or more.
And if you’re not a cash buyer but are shopping around for home loan financing instead? The mortgage process makes a lengthy transaction take even longer if you can believe it – no matter how prepared you are, entering the mortgage process for a home loan will easily take 45 – 60 days, minimum.
Let's go through the potential timeline one should be prepared for when starting the mortgage process:
1. Preliminary Preparation
The first phase of the mortgage process isn’t set in stone but describes everything you can and should do before looking for a home. If you know you’ll be financing the home, the more work you do ahead of time, the more time you’ll save down the road. To be best prepared, in addition to deciding what type of home and features you want, you can:
Do Your Due Diligence
Research mortgage types to determine what works best for you. You can also use a free credit scoring tool and mortgage calculator to determine how much home you can afford and what future payments may look like.
Get Things in Order
Gather all necessary documents. This includes, at a minimum, bank and investment account statements, information about any existing real estate, any benefit verification letters (i.e., if you plan on getting a VA home loan), past tax filings, pay stubs, W2s, and other important financial information you think a loan officer may need.
Get Pre-Approved
Mortgage pre-approval can be the first "real" step in the mortgage process, but you can also do it before shopping around. Pre-approval is a lender certifying a conditional mortgage approval up to a certain amount.
Pre-approval will tell you how much home you can afford and what rate you may be eligible for. You can also collect multiple pre-approvals to see which offers the best terms. Pre-approvals are generally good for 30 days, and you'll need one to make an offer on a home.
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2. Find a Home: 4 – 8 Weeks
Once you’re pre-approved, you’ll work with your agent to start looking for homes within your budget that meet your needs. This step tends to be the longest but depends on how picky you are and how much time you can devote to searching. Plan to take at least three weeks before selecting a home to make an offer on.
You'll then work with your agent to make an offer. Your offer also drives how long the mortgage process takes; for example, if your contract is contingent upon selling your current home, your mortgage team will only approve your loan once that happens. You can also include parameters like repairs to be done before closing, though this also delays the mortgage process until those actions are complete.
Once you both (buyer and seller) agree upon the terms of the offer, you'll sign a purchase agreement and contract that triggers the next step in our application timeline.
3. Apply for a Mortgage: 10 Days
You'll then contact the loan officer who pre-approved you, or whichever you think is best if you solicited multiple offers. Choosing a lender is complex, but you'll want to consider:
- What rate do they offer, and on what terms?
- How much of a down payment do they expect, and will you need mortgage insurance?
- Whether they allow certain actions post-closing, like recasting the mortgage.
- Whether they plan to sell your loan – this is often overlooked during the mortgage process, but ask your loan officer if the company sells mortgage loans or plans to service it for its duration. Many lenders package and sell mortgages to third-party servicers, which can be frustrating.
You’ll also order a primary home and pest inspection, which lenders (usually) require during the first step of the application timeline. If there are problems, the mortgage company may demand the seller fix them before approving, or you may have to renegotiate terms. You can also order additional inspections, like mold, during this period.
You'll likely be within the option period for your home buying contract during this phase, meaning you retain the option to cancel at any time. Option windows are generally ten days. If there is no option period, or it's shorter, expect the general mortgage application phase to last at least a week.
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4. Underwriting: 3 – 5 Weeks
Your loan officer hands the lender’s underwriting team the next step off. The underwriting team does the due diligence and “deep research” to ensure you’re fully eligible for financing before loan approval. This step includes a review of many personal financial documents, like those detailed during the preliminary pre-application process. Be prepared to jump through hoops to get paperwork you may not expect and to answer questions about anomalies within your financial history like:
- Large money transfers between accounts – they’ll want to ensure you aren’t borrowing money that isn’t reported within the credit bureau.
- Any dings or hits on your credit score, like missed payments or bills sent to collections.
- Inconsistent income between tax years. Debt-to-income ratios are important to underwriters so they’ll look closely if you don’t have consistent income.
Your underwriting team will also work with your and the seller’s real estate agent during this time for further due diligence on the home itself, like an appraisal, title search, and HOA “member in good standing” verification.
This phase's speed depends on your financial history, how quickly you can get answers or documents together, and how busy your underwriter is. Expect at least two weeks start-to-finish, but there could be as many as five or six before final loan approval.
5. Closing: 3 – 5 Days
Closing on the property is usually quick, but you’ll likely be restricted to the standard work week and unable to close on a weekend, which could delay the final step. Still, once the underwriting team approves your mortgage, you can expect to have keys in your pocket within a week.
During this phase, your lender will send a closing disclosure, which is a one-pager that details all the mortgage terms and how much cash you'll need to close when you sign the paperwork. You'll review and approve the disclosure and have up to three days to do so – but you should have a solid idea of your mortgage terms by this point with few surprises.
You'll do a final walkthrough, which takes a few minutes (or as long as you'd like), but this shouldn't delay closing unless you find major issues that weren't present previously. You'll then go to your closing at the title company, which takes an hour or two, but then you're done!
6. Post-Closing
Though the mortgage process takes two or more months, maintaining the home loan is ongoing for the loan's life or until you sell the home. Remember to maintain solid budget management to prevent defaulting on the loan – it's also a good idea to stash some cash away in an extra emergency savings account to cover a few months' worth of mortgage payments, just in case.
Conclusion
Once you know what to expect, home financing isn't too tough. You're likely excited to move into a new home, so it may seem your lender is dragging their feet. They're not, though – underwriting and proper due diligence take a long time. You can speed up the application timeline by gathering all needed financial documentation before diving into the real estate search.
Of course, if you need clarification about what step you're on, what's happening behind the scenes, or how much time you should expect from the current point forward, talk to your loan officer. It's in their best interest to keep you informed and happy, but they aren't always proactive about communicating what's happening at any given moment.
FAQ
What can slow down the mortgage process?
Outstanding debt, past credit issues, paperwork management, and other factors can slow down the home loan process, so make sure your ducks are in a row before shopping around.
How long does it take to get a mortgage?
If you’re lucky and well-prepared, it might take as little as a month. You should expect the entire process to take at least 45 days, however.
What else can I do to prepare for the mortgage process?
Beyond gathering financial documentation, avoid taking on new lines of credit within 30 days or so of applying for a mortgage. While it won't stop the process, a new car note or credit card may delay things slightly, as you'll need to gather additional documentation if it hasn't hit your report yet.
Article Topics
Mortgage Loans
Jeremy is a finance and investment writer who works with stock research platforms, wealth managers, and investment funds to deliver value to clients and customers. He couples his lifelong interest in financial topics with an MBA from the University of California - Davis, and loves breaking down complex topics to educate new and experienced investors alike. He lives in Austin, TX with his wife and young son.
