How long does it take to close a mortgage?
The average time to close a mortgage ranges from 45 to 60 days, but many will close in less — about 30 days.
This is the amount of time it takes from loan application to “loan funding,” which is when the new home or refinance loan is officially a done deal.
Depending on your loan type, credit profile, and loan purpose (purchase or refinance), your mortgage might close faster or slower than average.
If you have not yet applied, or if you have not found the right home to buy, your closing time frame could be longer.
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Average time to close a mortgage
In April 2022, the average time to close a mortgage was 48 days according to ICE Mortgage Technology. But many borrowers will close faster. The exact time to close depends on your loan type and how complicated your loan approval is, among other factors.
“Closing times vary, as national averages bring in loans that generally take longer to close than conventional loans, like VA and HFA loans” adds Jon Meyer, The Mortgage Reports loan expert and licensed MLO. “Most borrowers can expect to close a mortgage in 20 to 30 days.”
The time it takes to close a mortgage depends on where you are in the home purchase or refinance process.
The mortgage process itself — from application to final walkthrough and closing — generally takes between 30 and 60 days. If you’re refinancing a home you already own, that’s your entire timeline.
If you’re a first-time buyer or repeat buyer purchasing a new home, you have to factor in the house-hunting process. You need an offer accepted to get approved for a mortgage, so you can’t start the process in full until you’ve found the home you want. This could add an additional 1-2 months or more onto your timeline.
Closing timeline if you haven’t found a house yet
Closing on a house takes time. Exactly how much time depends on your “starting point.”
- If you haven’t yet found your dream home, you could spend a month or two just visiting houses with a real estate agent
- Once you find the house, it could take one to five days to make an offer, have the seller look at your offer, negotiate, and come to an agreement on price and other aspects of the real estate transaction
- At this point, you can make a full application for your home loan and get final approval for the specific home you’re buying
You can speed up this process by getting a mortgage preapproval as soon as you start looking at homes. Don’t let that 30 to 60 days go to waste.
Getting preapproval means the lender gives a thumbs-up to all aspects of your home loan besides the property. Once you have an accepted offer, your lender already has a serious head start on your final approval.
Closing timeline if you’ve already found a house
If you’ve found a home already, it will probably take between 45 and 60 days to close the home mortgage, based on national averages.
Keep in mind your situation can vary widely depending on your credit score, employment history, and other aspects of your financial life.
You can speed things along by preparing for the seven steps of underwriting described below.
Furthermore, you may be able to waive the appraisal requirement. But you can’t count on an appraisal waiver. Be careful not to over-promise closing speed to your seller. Your purchase agreement will state a closing date. You are expected to stick to it, or potentially lose the house and your earnest money.
Above all, have an honest conversation with your loan officer about how long it will take to close on your mortgage loan. Ask for a realistic or even pessimistic assessment, factoring in underwriting, processing, the appraisal, condition review, and closing/funding. It’s better to guess “long” than to have overly optimistic time frames you can’t reasonably hit.
How long after the appraisal to close a mortgage?
If your home appraisal process is complete, congratulations. You’ve finished one of the longest steps in the mortgage process.
You might be wondering how much longer you’ll have to wait for the final walkthrough and your closing day.
Typically, mortgage underwriters will be working on your approval while the home appraisal is underway. So when the appraisal comes in, the lender should be more or less ready to go.
It shouldn’t take longer than two weeks to close on your mortgage after the appraisal is done.
It shouldn’t take longer than two weeks to close after the appraisal is done. That’s not a promise, though. There are still plenty of potential hang-ups.
Your lender could find an issue on the appraisal (peeling paint, a roof in need of repair, etc.) that needs to be addressed. Or the seller might have a problem with the home they are purchasing, delaying the sale.
But don’t let those items worry you. They happen frequently and are usually resolved in one way or another. Still, be vigilant with your lender. Make sure it is speeding your file through the rest of the loan application process.
Mortgage closing times by loan type
The type of loan you get can make a difference in your closing time. ICE Mortgage Technology breaks out average closing times by loan type:
- Conventional purchase: 47 days to close
- Conventional refinance: 48 days to close
- FHA purchase: 50 days to close
- FHA refinance: 54 days to close
Keep in mind closing times vary widely depending on the situation. A cash buyer, for instance, might close in a matter of days. A mortgage borrower with a questionable credit report and income verification may need 60-90 days or longer.
If you’re trying to close on a home fast, apply for prequalification or preapproval with your lender as soon as possible — even before you find a home.
Plan your rate lock to match your closing date
When you finance a home using a mortgage, your interest rate is based on time-to-close. The fewer days it takes to get you from “rate lock” to “closing day,” the lower your mortgage rate will be.
This is true for purchase mortgages and for refinance loans, too.
For every 15 additional days it takes to close your loan, in general, your quoted mortgage fees increase by 12.5 basis points (0.125% of the loan amount).
The fewer days it takes to get you from “rate lock” to “closing day,” the lower your mortgage rate is likely to be.
However, you don’t get the liberty of choosing the shortest possible mortgage rate lock, then extending 15 days at a time as needed.
At the beginning of the mortgage approval process, mortgage lenders require borrowers to state for how long they’d like to lock their loan. The typical mortgage rate locks last for 30 days, 45 days, or 60 days with extended mortgage rate locks available upon request.
Ideally, borrowers should choose the shortest rate lock period that allows the lender to complete the loan process; and, for a home purchase, that extends through the home’s closing date.
The mortgage closing process
Knowing what to expect at closing will help you prepare and avoid any unnecessary delays.
Sign closing documents
Your closing agent will have a handful of documents for you to sign on closing day, including:
- Closing disclosure
- Escrow disclosure
- Deed of trust
- Mortgage promissory note
- Proof of homeowners insurance
- Certificate of occupancy
Settle closing costs
You’ll either need to bring a certified cashier’s check to the closing table or wire transfer the funds. In addition to loan origination fees charged by your lender, some of your closing costs will include:
- Down payment: If you’re putting money down, which is required on a conventional loan and an FHA loan, then you’ll need to pay an agreed-upon percentage of the home’s purchase price
- Escrow funding: Your lender may require an additional sum to pay for pending insurance and property tax costs to be deposited into your escrow account
- Third-party costs: Funding to cover third-party services such as the home appraisal, title search, and credit report, to name a few
- Prepaid interest: Borrowers are still on the hook for interest that accrues between the closing date and your first monthly mortgage payment
- Mortgage points: If you purchased mortgage points, also known as discount points, these are due at closing
- HOA fees: Not everyone will pay homeowners association (HOA) fees, but for those buying into a planned-living development may be responsible for HOA transfer fees or even monthly dues
Once the closing documents have been signed, your new county or city recorder’s office will register your home ownership. Congratulations, unless your contract delays occupancy, you can now move into your new home.
Seven tips to speed up your mortgage closing
When your mortgage loan is submitted for approval to a bank, there are roughly seven separate steps in the loan application process. What follows is a brief explanation of each step, and what you might be able to do to speed your loan along.
Note: For best results, the first three steps can — and should — be completed prior to shopping for a home.
Step 1: Initial mortgage application
When you give a mortgage application to your lender, it’s either completed in-person, by telephone, online, or via an app.
Completing a mortgage application, if you’re prepared, will take 20 minutes to an hour.
“Prepared” means having:
- Your employment and address information for the most recent two years at the ready
- Your employer’s and landlord’s contact information handy
- Your bank statements along with retirement and investment account statements
- Proof of your income, which may be via pay stubs or tax returns, so the lender can determine your debt-to-income ratio
In many cases, after taking your application, a lender will be able to offer a “preliminary approval.”
This means your loan is conditionally-approved — assuming you can support the information provided above with additional documentation and paperwork.
Step 2: Provide supporting paperwork and documentation
After it issues your preliminary approval, your mortgage lender will ask you to provide paperwork to document the information you’ve shared as part of your application.
Typically, this paperwork includes pay stubs, W-2 statements, federal tax returns, and account statements for your savings and retirement accounts.
Additional documentation requests may include copies of business licenses, gift letters for down payments, and proof that a student loan is in deferment.
After reviewing the paperwork, your mortgage lender may ask for additional supporting information, which may include written explanations for “large, atypical deposits” in your bank account or anything else.
Reviewing your loan paperwork is a task typically completed within two days, but it can sometimes take as long as a week.
In general, the faster you comply with your lender’s request for paperwork and supporting documentation, the faster your file can be processed.
Step 3: Credit approval letter
Once the lender has reviewed and “signed off” on your paperwork, it will issue a preapproval letter to you.
A preapproval letter is your proof that your loan can be approved, so long as the property you purchase meets lender guidelines, and so long as you don’t make any “material” changes to your application.
Material changes include a change in employment, income, credit, marital status, or down payment.
Changes in your application don’t necessarily nullify your approval. However, they do require that your loan get re-underwritten and re-approved.
This could lengthen the closing process considerably. So avoid making any financial changes prior to closing, if at all possible.
Step 4: Home appraisal process
As the next step in the mortgage approval process, your mortgage lender will schedule a home appraisal.
For home buyers, this step won’t happen until after a home has been chosen and after the home inspection has been completed.
Refinancing homeowners who choose an FHA Streamline Refinance or VA Streamline Refinance won’t need an appraisal.
Appraisals can take up to a week to complete, depending on the property. It may take a week just to get on an appraiser’s schedule.
Therefore, when it’s time to schedule the appraisal, try to schedule it as soon as you possibly can.
Every day counts when you’re trying to preserve a rate lock, so if the appraiser wants to come see the home tomorrow morning, find a way to make that possible!
Step 5: Lender’s review of the home appraisal
After the appraisal is completed, the lender will “double-check” it for validity.
In general, mortgage lenders’ appraisal review process is lax — the appraiser is the expert, after all.
However, if the appraised value of the home is more than a few percentage points higher than the lender’s expectation for what that value should be, the lender may ask to commission a second, verifying appraisal.
Scheduling this second home appraisal can add another week to your closing, which can increase your mortgage rate and closing costs. This is a rare occurrence, however.
Most times, lenders will accept the appraiser’s valuation of a home as-is, and will issue a “final approval” which states the loan is approved subject to certain closing conditions.
As the borrower, your closing conditions may include finalizing your homeowners insurance policy, depositing your down payment into an escrow account with the title company, and signing your final set of mortgage documents.
Step 6: Mortgage loan closing
After the lender has issued its final approval, the only thing left to do is to close on the mortgage. However, until the closing has completed, it’s your duty as the borrower to not change anything which could affect your mortgage application.
For example, between your final approval and your closing, don’t quit your job, don’t buy a car, don’t put furniture on layaway, don’t apply for a credit card, and, most importantly, don’t miss any monthly payments to a creditor.
Any of these events could cause your approval to be revoked. Only after your loan is funded and money has changed hands can the loan be considered final.
Step 7: Rescission period (for refinances only)
For refinance loans of a primary residence, the closing doesn’t mark the end of the mortgage loan process — there are another three business days during which the loan can be canceled.
These three days, known as the Rescission Period, are a borrower’s right. They give homeowners a chance to change their mind and cancel the loan entirely.
The three-day Right to Cancel cannot be waived and must be figured into the mortgage rate lock period.
Mortgage closing FAQ
It typically takes two weeks after appraisal to close a mortgage. But this isn’t a promise. Your mortgage underwriting process could take longer if you have a low credit score or are self-employed and need to submit tax transcripts to document your income. It’s also possible a lender could ask for a verifying appraisal, delaying closing by a week or more.
Federal law requires a three-day minimum between loan approval and closing on your new mortgage. You could be conditionally approved for one to two weeks before closing.
If you’re a cash buyer, you could close on a house within a few days. Closing on a mortgage loan will take longer — generally 30 days for conventional loans.
This is rare but not impossible. To avoid this possibility, don’t make any changes in your financial life between making an application and signing the closing papers. Significant changes to your credit history or income could threaten your approval. It’s also possible new disclosures about the property itself could change the lender’s mind about your mortgage. Be sure you’ve read and understand your home inspector’s report before closing.
You can get a pretty good idea of your monthly mortgage payments before closing. But remember, your monthly payments will include more than just repaying the loan and interest. For most homebuyers, monthly payments also include property taxes, homeowners insurance premiums, and mortgage insurance if you made less than a 20 percent down payment on a conventional loan.
What are today’s mortgage rates?
The faster you can close on a mortgage, the lower your mortgage interest rate can be. Know the steps in the home buying process, and where you cut time and corners to get to closing quicker.
Get started on your mortgage application as soon as possible to have better chances of a fast home loan closing.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.