How Long Does It Take To Get Approved for a Mortgage?

The majority of people find the process of buying a home to be an exciting and memorable time in their lives. The actual process of getting a mortgage approval, on the other hand, can quickly put a damper on things, and it frequently turns out to be quite stressful for buyers who are anxious. However, you can take actions that will shorten the timeline or, at the very least, ensure that it will not be extended. We'll go over the mortgage approval process to better understand what's involved and how you can help the process move along more quickly.

Key Takeaways

The first step in getting a mortgage is getting prequalified and/or preapproved for the loan. The next step is the actual formal loan underwriting process, and the last step is getting final approval.
It is possible to keep the mortgage process moving forward by submitting complete and accurate documents. On the other hand, the process could be slowed down by negotiating with sellers or running into problems during an inspection.
When applying for a mortgage, the amount of time it typically takes from beginning to end to complete the process can vary greatly depending on a number of different factors.

The Process of Getting Approved for a Mortgage

There are many stages in the mortgage approval process, beginning with preapproval and continuing through making an offer, underwriting, and finally receiving final approval. We will go over each of these in turn.

Submitting an Application for Pre Approval

Timeframe: anywhere from one day to one week Preapproval for a mortgage is an essential first step in the process of purchasing a home because it provides you with an estimate of the amount that a lender is willing to allow you to borrow. Due to the fact that a borrower's credit history and various other documents need to be collected, the process of obtaining a preapproval can take up to a week. In an email to The Balance, Andrina Valdes, Chief Operating Officer of Cornerstone Home Lending in San Antonio, Texas, said the following: There is no guarantee that it will take that much time; the borrower's circumstances typically determine the process's duration. Note: A preapproval letter is not a contract; rather, it is an offer to lend you a particular amount, and it is only valid for a period of ninety days.

Looking for a New Home and Presenting an Offer

Timeframe: Varies You are ultimately in charge of determining how long the house-hunting and offer phases last. It's possible that you'll find the house of your dreams on the very first day, but it could also take you several weeks or even months to choose the one you want to make an offer on. After you have done so, your agent will write up the offer, and you will then be required to sign it. The offer will typically include:

The targeted closing date.
Provisions for certain fees.
A deadline for them to accept or counter your offer.
Any contingencies that may be involved.

Note: When considering all fees, interest, taxes, and insurance, most mortgage lenders recommend spending no more than 28 percent of your monthly income before taxes on your mortgage payment. There is always the possibility of negotiations taking place, which can push back the timeline for purchasing a house.

Acceptance of the Offer

Timeframe: Varies If the seller agrees to your terms, the purchase and sale agreement will become legally binding, and the next steps in the process will include an inspection of the property and an appraisal of its value. The duration of this process is highly variable and is determined by a number of different factors. For instance, you will need to take into consideration how long it might take to get an appointment for a home inspection, as well as whether or not the inspection reveals any issues. The process may also be held up if the sales price is significantly different from the property's appraised value.

Underwriting

Duration of the process: 30–45 days The formal underwriting process is the next step in the process. The kind of mortgage loan you get will, in the end, be the deciding factor regarding the documentation you have to provide. As a general rule, the following are the requirements that are typically imposed:

a valid driver's license or another form of picture identification
Pay stubs
W-2 forms requiring a Social Security number for the previous two years
Documentation of any additional sources of income
Tax returns
Current bank statements or evidence of your other assets are required.

Additionally, once you've reached this point in the underwriting process, it will check to see if the documents you've provided back up your credit score. And according to Alvarez, there are two factors that borrowers typically don't consider that could potentially slow down the process at this point. It is recommended that you remove your name from any joint bank accounts that are being used to pay for a property that you and a member of your family or a close friend jointly own but for which you are not contributing monthly payments. In that case, the joint mortgage will be considered a liability for both parties. To prevent unnecessary delays during the underwriting phase of the mortgage approval process, it is in your best interest to have all of your documentation in order. An agent for Warburg Realty in New York, New York named Karen A. Kostiw stated that the lender's underwriters are currently reviewing loan applications for what is known as the "Five C's of Credit," which are character, capacity, capital, collateral, and conditions. Because of this, information regarding your income, debt, and employment is carefully examined. According to Jones, the duration of the underwriting process can range anywhere from 20 to 45 days, depending on its importance. He suggested promptly responding to any inquiries and avoiding major purchases or job changes during this time to keep things moving along as smoothly as possible. Note: Mortgage regulations include a provision known as "Know Before You Owe," which guarantees that you will be given a Closing Disclosure that is clear and concise three business days before the transaction is finalized. You can make use of this time to review it as necessary with your attorney or housing counselor so that you are clear about every aspect of the terms and costs associated with your mortgage.

Questions That Are Typically Asked (FAQs)

When you apply for a mortgage, how many days before closing do you need to have it approved?

According to the Origination Insight Report from August 2021, the typical amount of time required to close on a mortgage loan is approximately 49 days. However, there are some lenders who can complete the closing on your mortgage in as little as ten days or as much as a few weeks.

How long does it take to get approval for a mortgage?

In most cases, a commitment letter is only valid for a period of thirty days, but the validity period for some letters can extend to ninety days. There may also be expiration dates listed based on the borrower's documents, and the commitment can be extended so long as buyers keep those up to date so long as buyers keep those up to date. Because the timelines can ultimately differ depending on the lender, it is in your best interest to obtain this information from your lender.

What exactly is meant by the phrase "conditional mortgage approval"?

After the initial review of the mortgage application has been completed, the underwriter may issue conditional approval for the loan if there are outstanding concerns or requests for additional information or documentation. If there is a significant deposit made into your account, for instance, the underwriter may inquire as to the source of the money and request an explanation from you. This is primarily done to ensure that all information is accurate and that the mortgage lender will not face any unnecessary financial risks as a result of the closed loan.