The time it takes to close a mortgage loan varies with the type of mortgage, buyer/homeowner situations, and lender processing efficiency. According to Fannie Mae the average closing time for a new purchase is 46 days, and 49 days for a mortgage refinance. A good rule of thumb, however, is to assume that a typical mortgage loan will take around four to six weeks to close from application date.
Delays in closing are due to underwriting requirements. When a loan officer puts your loan file together they have to submit it to a mortgage underwriter. If anything is missing the loan application is kicked back to the loan officer to gather the missing information.
In some cases, the underwriter will require more documentation. If you are unable to close by the date listed in the real estate contract you will need to ask the seller for more time to close.
Here are some of the most common reasons for delays in closing:
Unable to trace down payment funds
Inexperienced loan officers
Late payments or collection accounts noted on the borrower’s credit report
Debt that needs to be paid off prior to closing
Additional updated bank statements needed
Delayed final walkthrough
Issues found in the title search
Liens or judgments on the property
Incomplete loan application
Agreed upon repairs not completed
How to close your mortgage quickly and on time:
Have all of your closing documents submitted
Make sure your funds are readily available
Don’t make any big-ticket purchases
Hire experienced people
Respond to all requests in a timely manner
If you’re planning to purchase, refinance, or learn more about mortgage rates our experienced mortgage professionals would love to sit down and discuss your needs. We look forward to hearing from you!
Contact a licensed housing specialist now! 602-429-6789