How quickly can I close on my home?

July 20, 2022
Posted in Programs
July 20, 2022 derekevansteam

One of the top things that buyers want to know when it comes to purchasing a home is how long it will take to close. While the answer to this obviously depends on a variety of factors, there are ways in which you can predict how quickly your closing will take. Additionally, there are things you can do and pitfalls you can avoid in order to push through to closing quicker. In this article, we’ll give you some tips on what it takes to close quicker and what could affect your timeline.

How long does it usually take to close?

Closing can take anywhere from one week to 60 days. The average amount of time for closing is 30-45 days. Getting your documents in on time, signing as necessary, and having a clear channel of communication between you, the seller, and your lender will help expedite the process immensely and avoid headache. However, we’ve closed loans in 10 days, so it’s definitely possible to move that quickly with full cooperation from all parties.

The loan closing timeline & how to speed up the process

Application (1 day)

This is the first step in the process: applying for a home loan. This step will provide the lender with all of the information they need to confirm the amount that you can take out as a loan.

What you can do to speed up the process:

    • Get an underwritten pre-approval before your home search even begins. This will ensure that you apply for homes that are within a reasonable budget for you so you can get the right loan amount and avoid complications in closing. 
  • Ensure that your application is filled out thoroughly and accurately. If you provide the most accurate information possible, your approval process will go much smoother. If, for example, you inflate numbers for your pre-approval, this could cause issues with your actual application. No one wants to find out they actually qualify for less than they originally thought. 

Disclosure (< 1 week)

This stage usually only takes a few days and is mostly on the lender’s side. The lender is responsible for supplying the terms of the loan: projected monthly payments, fees and other closing costs. 

Documentation (< 1 week)

During this stage, the lender will request actual documentation of your income and assets to get a clearer picture. 

What you can do to speed up the process:

  • Be organized. If you’re able to get your documentation together quickly (or better – have it prepared before even submitting your application!) and send it to your lender ASAP, this will expedite the process immensely. 
  • Communicate everything. Certain things like additional income sources (like a rental property, freelance income, etc) may complicate the process, so make sure you communicate anything and everything to your lender so this doesn’t cause any unexpected roadblocks.

Appraisal (1-2 weeks)

An appraisal is when an expert assesses your home to determine its value. If you’re purchasing, the results of the appraisal will have a huge effect on the amount you can borrow. For more information on this process, check out our blog on the topic.

What you can do to speed up the process:

  • Work with a lender who will provide accurate and complete information for the appraisal. Typically, the lender will actually order the appraisal and choose the appraiser, so you as the buyer won’t have too much say in this process. However, by choosing a reputable and communicative lender, you can be rest assured that all of the boxes are checked for a smooth appraisal process.

Underwriting (1-3 days)

The underwriting process is when all of the information and documentation you’ve provided goes under more intense scrutiny by experts who ensure that you are a good candidate for a loan. Underwriters will verify your income, savings, assets, debt and credit history, as well as verifying information about the property. 

What you can do to speed up the process:

  • Work with a lender who does underwritten pre-approvals. Many lenders only offer a “soft” pre-approval that’s written up based on the information you provide. To ensure your best shot at the most accurate pre-approval numbers, you’ll want a fully underwritten pre-approval letter. Our Fairway Advantage Pre-approval, for example, goes through our in-house underwriting team so that there are no surprises during closing and you get the most accurate estimate on your loan. 
  • Work with a lender who has their own in-house underwriting team. Our in-house underwriting team allows us to communicate efficiently and effectively and turn your application around much quicker than an outsourced team would. Make sure you work with a lender who handles all of their own underwriting.

Conditional approval (1-2 weeks)

Even if you had all of your documents in order, there’s still a chance that you may get requests for further documentation. 

What you can do to speed up the process: Again, this is where working with a reputable and experienced lender will help you. Being able to reach your loan officer or support team any time and knowing they are working around the clock to get your application through to close is invaluable.

Cleared to close (3 days) 

Following your clearance to close and final disclosure of the terms of your loan, you must wait 3 days. During this time, you should review the terms and ask your lender any questions you may have.

Closing and funding (1 day)

Closing day! This is when you’ll attend your appointment to sign all of your papers and get everything squared away. There will be one final review process before your mortgage is formally recorded with your county.

Common reasons closing gets delayed

It’s good to be aware of the most common factors that can delay a close so that you may avoid them. Here are the number one obstacles that hopeful homebuyers run into:

Financing issues. If you are unable to qualify for the loan amount you need based on documentation issues, income changes, rate spikes, etc., your closing could be delayed or even canceled. This is where that underwritten pre-approval is invaluable.

Home appraises for lower than purchase price. This could lead to your lender not wanting to fund the difference. In an ideal situation, the seller may agree to come down on the price, which is the best scenario. However, if they are not, you can always ask your lender to get a second opinion, OR be willing to cover the difference yourself in cash if you can swing it.

Issues during inspection. A home inspection is when a professional goes into the home and looks around for any major or deep repairs that the appraiser doesn’t look for. If there are major structural issues or damage to the property, this could cause closing to be delayed because of the additional finances that would be needed to make adequate repairs.

The best way to ensure a quick close? Work with a good lender

The majority of the closing process rests in the hands of your lender. While it is up to you to provide adequate documentation in a timely manner, your lender is responsible for processing this information and pushing it through all the necessary steps to secure funding. This is why it’s crucial to work with a lender who will be working around the clock to see to it that your application is on track to close.

Need to close fast? We got you! Reach out to us today.