When buying a home, your loan application goes through several distinct stages. With today’s red-hot housing market, the timing of each stage can affect your ability to bid on a specific home, so it pays to understand processing time for each stage, and how you can help expedite the process. The typical home mortgage takes between 30 and 45 days to complete, but the ultimate question, of course, is how long will it take for YOUR mortgage to be approved? The answer: it depends on several points, including how much verification the processor (the person who actually processes your loan) is required to do on each part of your application, whether you’ll need to provide more information to support your application, how fast you provide the needed information and other factors that can vary tremendously. We must stress the importance of getting documentation to your loan specialist quickly in order to be approved for a mortgage. Providing the documentation as soon as possible to your loan specialist sets the loan up for success, as mortgage loans are a process and every document provided could potentially reveal a new item that needs to be documented.
Beyond slow turnaround time with your documentation, the complexity of your financial situation may also determine how long your loan could take to get approved. That’s why it’s best to start the mortgage application process as soon as possible to ensure that the application process is one less item that you have to do when you find your new home. You don't have to wait until you find the perfect property before you begin the mortgage process – as we talked about in our previous post
, getting a pre-approval can greatly facilitate your home buying process!
Here are a few points that can affect your loan’s processing time, along with some actions you can take to help, if needed:
In this step, the processor will follow up and verify the information you supplied in the application process. Income, credit history, employment history, and bank statements are confirmed and verified, and any questions that come up in this process must be explained to the underwriter’s satisfaction. Although you may not have much control over the verification of most of these items, you should ensure all documents you provide to the lender are submitted in a timely fashion, and are as detailed and accurate as possible.
One of the most important factors in the mortgage approval process is your credit history. The underwriter will review your credit report to see how well you made payments on, or paid off car loans, student loans and other lines of credit.
The underwriter will then review your employment history, income, debt and assets. They’ll look at your savings, checking, 401k and IRA accounts, tax returns and other records of income, as well as your debt-to-income ratio. The lender looks for indicators to help them predict your ability to pay back what you borrow. They want to see that you, and any co-borrowers, have the ability to make the payments both now and in the future.
The borrower will often order a home inspection, which is a visual evaluation of a home's features and overall condition. This on-site evaluation, completed by a licensed inspector, checks the performance of the home's roof, driveway, foundation, framing, and the general condition of windows, doors, floors, ceilings, and walls.
The processor will order a home appraisal to determine the value of the property (if required) to verify that the home’s overall value meets the requirements of the particular type of loan you’re requesting.
Once your loan goes to underwriting, your UHCU Loan Specialist will stay in touch with you throughout the loan process. Prompt responses to any requests from your Loan Specialist will shorten the underwriting time as much as possible. Once any questions are resolved, the loan can move to final approval.
If you have any questions or concerns, reach out to your UHCU Loan Specialist – we’ll be with you every step of the way!