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The average amount of time it takes for homebuyers in the United States to close on their home purchases (as of February 2019) is 47 days across all loan types, according to leading mortgage software company Ellie Mae. In general, purchase loans take longer to close than refinance loans by an average of 12 days. Learn more about the purchase process, time spent at each stage and tips for keeping your closing on track below.
- How Long Does it Take to Close on a House?
- Typical Closing Times: By Loan Type
- How Have Closing Times Changed Over Time?
- How Can I Get a Fast Home Loan Closing?
How Long Does it Take to Close on a House?
It is important to note that while average closing times might be 47 days for a purchase and 35 days for a refinance, most loans will actually take between 30 days and 75 days to close. If you select a close of escrow date of 30 days or less, you’ll need to work closely with your lender to ensure that the loan stays on track to close in time.
If you’re taking out a mortgage to purchase your next home, the process of closing on the home takes an average of 47 days, from application to closing and funding. Certain steps in the loan process are governed by mandatory waiting periods, while others are dependent on third-party service providers (like appraisers). Here’s a step-by-step to the typical loan process:
Summary: Average Timeline for Closing
|Milestone||Time to Complete|
|Disclosure||Up to 3 days for disclosure delivery; additional time for review and completion|
|Documentation||A few days to weeks depending on review times and availability of information requested|
|Appraisal||1-2 weeks for completion|
|Underwriting||1 to 3 days for initial review|
|Conditional Approval||1 to 2 weeks for additional underwriting review and clearing of conditions|
|Cleared to Close||3 day mandated minimum for acknowledging Closing Disclosure|
|Closing and Funding||1 to 3 days to receive and review signed loan documents and disburse funds|
If your scenario is complex (due to your income or other factors), then it may take additional time and effort to close your loan. Other factors, like appraisal turnaround times, are beyond your control but could also impact how quickly your loan closes. It’s often a good idea to disclose potential red flags up front rather than wait for the underwriters to catch them and ask additional questions down the line.
Application (1 day)
Once your offer on a home is accepted, you can begin the loan process with an official loan application. There are six pieces of information required for a mortgage lender to consider your application: your name, Social Security number, estimated income, property address, estimated value and requested loan amount.
The complete Uniform Residential Loan Application, or URLA, spans five to six pages of information needed to fully process and underwrite your application. Your lender might ask you this information over the phone, have you fill out an online form or have you fill out a paper copy. The application process should be completed on the first day.
Disclosure (~3 days)
As soon as a mortgage lender has the six details mentioned above, they are required by law to provide you with official loan disclosures, including a Loan Estimate within three days.
Most lenders will ask for your consent to send disclosures electronically so that all of the initial paperwork can be provided via secure link through a portal, or via an electronic signature capture service. It’s important to note that if you do not give your consent, paper copies of all disclosures will be sent to you through the mail—potentially adding days to the loan process.
Documentation (~few days)
Your lender will need additional documentation from you regarding your income and assets in order to submit a complete file for underwriting. Often there are multiple requests for information, as additional questions may be raised during the review of your documents. For example, if your tax returns show income from a rental property, then mortgage, property tax and homeowner’s insurance information will be requested.
The process of requesting, gathering, sending and reviewing documentation and information could take just a few days, or much longer depending on the availability of your documentation and the time your lender takes to review it.
Appraisal (1-2 weeks)
Ordering your appraisal can take place as soon as you provide your lender with your signed Intent to Proceed form. The earlier you can order the appraisal the better, as this third-party service is required to close most loans and depends on the scheduling of a licensed, independent appraiser.
The appraisal process itself involves scheduling the initial inspection, the appraiser performing their inspection and the preparation of an appraisal report. The report is delivered to the appraisal management company for a quality control check before being returned to your lender. This process could take one to two weeks, though the process may take longer for more remote locations. For sellers, it's a good idea to take this time to make some cosmetic improvements to your property to help increase the likelihood that your appraisal comes in at a reasonable value.
Underwriting (1-3 days)
All of the information regarding your income, assets, property and credit will be reviewed by an underwriter, or team of underwriters, to ensure that your application meets all of the program guidelines for the loan product you’re seeking. In addition to general product guidelines, many lenders have internal guidelines that go above and beyond the base requirements (sometimes called overlays) that you must meet as well.
Underwriting turn times vary from lender to lender, but 24 to 72 hours is considered normal. If you find yourself in a hot buyer’s market, or in the midst of a refinance boom however, turnaround times will often stretch due to increased loan volume.
Conditional Approval (1-2 weeks)
Once your application submission has been reviewed by an underwriter for the first time, they will either conditionally approve your file, suspend your file pending additional information required to make a decision, or deny your file if it doesn’t meet program guidelines.
A conditional approval will often come with a list of additional documentation, letters of explanation and additional information that the underwriter will need to review before signing off on final approval of your loan. The process of requesting, gathering, sending and reviewing conditions may go through multiple rounds of back and forth before the underwriting requirements are satisfied. Depending on turn times for review, this could take one to two weeks.
Cleared to Close (3 days)
Getting the all clear to close is the last step before your final loan documents can be drawn up and delivered to you for signing and notarizing. A final Closing Disclosure detailing all of the loan terms, costs and other details will be prepared by your lender and provided to you for review.
There is a mandatory three-day waiting period after you receive the Closing Disclosure before you can sign your loan documents. The law mandates that you be allotted this period to review your final loan terms and consult with any advisors that you need.
Closing and Funding (~1 day)
After you sign your final loan documents, they are returned to your lender who will review them for completeness and ensure that all third-party reports and information are in order before disbursing the loan. Once your loan has funded, the new mortgage will be recorded with your county, sometimes on the same or next business day.
Typical Closing Times: By Loan Type
Different types of loans take longer to close depending on the program requirements and guidelines. Here’s a breakdown of the average closing times, in days, between average mortgage loans, FHA loans and VA loans:
|Loan Type||Time to Close (Days)|
Average Closing Time for a Conventional Loan
It takes approximately 47 days to close on a conventional mortgage loan in accordance with Fannie Mae's qualified lending standards. Conventional refinances are faster and take around 35 days to close on average.
Conventional mortgage loans follow the most traditional path from application through closing and funding. Unlike FHA and VA loans, there typically aren’t specialized underwriting, appraisal or approval requirements over and above Fannie Mae or Freddie Mac guidelines. Generally speaking, refinances will take significantly less time to close than new purchase loans.
Average Closing Time for an FHA Loan
It takes around 47 days to close on an FHA mortgage loan. FHA refinances are faster and take around 32 days to close on average.
FHA loans generally close in a very similar timeframe to conventional loans but may require additional time at specific points in the process. For example, appraisals on FHA loans must be performed by an FHA approved appraiser, and any safety or habitability issues must be fixed before your loan is allowed to close. The large difference in closing times between FHA refinances and purchase loans is likely due to the expedited process afforded by FHA streamline refinances.
Average Closing Time for a VA Loan
It takes approximately 49 days to close on a VA mortgage loan. VA refinances are faster and take around 42 days to close on average.
VA loans tend to take longer to close than conventional loans. This is due to the stricter underwriting requirements for VA loans and the fact that not all lenders underwrite VA loans in-house. The large difference in closing times between VA refinances and purchase loans is likely due to the expedited process afforded by VA streamline refinances.
Only lenders with a direct endorsement from the VA may underwrite their own VA loans; other lenders must submit their loan files directly to the Department of Veterans Affairs for review and approval, significantly increasing the time to close.
How Have Closing Times Changed Over Time?
As of February 2019, closing times have maintained a tight range of 42 to 48 days averaged across all loan types over the past 18 months. This indicates that despite seasonal market fluctuations and shifting housing trends, it takes approximately six to seven weeks to close on a mortgage loan.
Improvements in underwriting procedures combined with a shift to digitized mortgage lending have sped up closing times on average. However, while many online lenders boast expedited closing times, your experience may vary widely depending on your financial profile as well as the capabilities and capacity of your chosen lender.
How Can I Get a Fast Home Loan Closing?
There are several things you can do to help speed up the closing process. As a general rule, it pays to be prepared and timely when it comes to responding to lender inquiries.
Start the loan process as soon as possible by getting preapproved.
Before you’re even under contract on the property, get preapproved by your lender by providing them with your income, asset and credit information. In order to issue a preapproval letter, your lender will have to pull your credit report, calculate your debt-to-income ratio and verify your assets available for the down payment.
Getting this done in advance saves some time once your offer is accepted and adds to the likelihood that your loan is likely to be approved. It’s a good idea to get preapproved across multiple lenders at this stage to make sure you’re getting the best mortgage rate.
Respond to all lender requests quickly and provide complete documentation.
By providing all documentation as quickly and completely as possible, you can help keep the process moving. Many closings are often held up because the borrower isn’t paying attention to emails or picking up calls.
It’s a good idea to respond quickly if the lender asks you to sign disclosures, return requested documentation or acknowledge time-sensitive documents like the Closing Disclosure so that mandatory waiting periods can begin. This will require some extra diligence on your part, but the effort pays off once the loan is disbursed.
Choose a digitized mortgage process.
Choosing a mortgage lender who offers an online or digital mortgage process can also help speed up the process by leveraging technology to prepare documents and disclosures.
Digitized mortgage lenders can complete electronic signatures and even underwrite loan applications according to Fannie Mae or Freddie Mac guidelines. While there’s no guarantee that other parts of the loan process will move as quickly, a commitment to boosting efficiency via technology can be a good indicator of a company’s ability to close your loan quickly.