So you’ve gotten pre-approved, found your dream home, and your offer was accepted.
In this article, we will take a look at the average time it takes to close and give you some advice to make sure you close on your home in time.
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Average Time to Close on a House
There are lots of steps involved in the mortgage process from the loan officer gather all of your documents, the underwriters then have to review the documents and often require additional documentation. There are many different companies involved from the lender to the escrow company, title company, home appraiser, home inspector. You can expect to wait a minimum of 30 to 45 days until you officially close and receive the keys to your hew home.
According to the latest Ellie Mae insight report, the average time it took to close on a home increased to 49 days for new purchases and 51 days for mortgage refinancing. This is an increase of 3-4 days from a year ago.
Once your offer is accepted, you’re in escrow. The escrow process timeline can vary depending on the market, lender, and how quickly you respond to document requests.
- Executed purchase contract included the purchase price and closing date
- Mortgage application and underwriting
- Earnest money deposit
- Purchase title and homeowners insurance
- Home inspection
- Requested seller repairs
- Home appraisal
- Closing disclosures
- Final loan approval (clear to close)
- Final walk through
What is the closing day?
The closing day is the final step in the mortgage process when you take ownership of the property. The closing date is set in the real estate contract signed by the buyer and seller; usually, 4-8 weeks after the offer is accepted. Closing on the house usually takes place at the title company.
Home closing delays
Delays in closing are due to underwriting requirements. When a loan officer puts your loan file together, they must 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.
According to Matt Schwartz, branch manager at Southlake Funding, the most common reason for closing delays is inexperienced loan officers.
In some cases, the underwriter will require more documentation. If you cannot close by the date listed in the real estate contract, you will need to ask the seller for more time to close.
Common Reasons Closing is Delayed
- 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 before closing
- title issues
- additional updated bank statements needed
- Delayed final walkthrough
- Leins or judgments on the property
- Missing documentation
- Incomplete mortgage application
- Home appraisal is lower than the purchase price
- Agreed upon repairs not completed
How to Close on Time
To avoid closing delays and close on your house on time, you will need to be responsive to your lender and real estate agent.
Anytime your lender requests information, you should try to produce the required mortgage documents as fast as possible. Being prepared for everything your lender could ask for is one way to stay ahead of the curve.
Documents needed for the Closing Process
- Earnest money deposit
- Escrow account set-up
- Completed home inspection
- Final walk through
- An executed promissory note and deed of trust
- Fully executed purchase agreement and addendums
- Completed home appraisal of the property
- Loan approval from the mortgage company
- Buyer’s and seller’s signatures on loan documents
Closing Day Tips
You should take off the day of your closing. Bring all the documents you have to the title company’s office. You will need a check, money order, or cashier’s check made payable to the title company or lender for the down payment and other closing costs you’re paying up-front.
- Take the day off
- Bring all mortgage documents you have
- Take your checkbook
- Photo ID (Drivers license)
- Proof of Insurance
The Home Inspection
You should always have the house you’re purchasing inspected before closing. Make sure you get your home inspection performed as soon as possible. If there are any repairs that you want the seller to address before closing, you want to give them ample time to do so.
Getting Pre-Approved First
Before you start searching for a home, you should get a pre-approval letter. This is different than a pre-qualification. A pre-qualification means a lender has pulled credit and you qualify based on your provided income and credit. However, lenders do not verify income for pre-qualification.
A pre-approval letter means the lender has pulled credit and verified income with pay-stubs, bank statements, and tax returns.
Frequently Asked Questions
Can you close on a house in less than 30 days?
In some cases, you can close on a mortgage within 30 days. You will need to work with an experienced loan officer and real estate agent. and have all of your loan documents ready for the lender.
How long does it take to close on a house after loan approval?
After a loan goes through underwriting and is approved, also called “clear to close,” the closing usually takes place 3 to 5 days after.
How long after appraisal does it take to close?
Can a seller back out if closing is delayed?
Yes. If you do not close on a home on the date in the original purchase agreement, the seller can cancel it and sell the home to someone else. However, sellers are usually willing to work with buyers to delay closing for a couple of weeks.
How long does it take to close on a house with cash?
1-2 weeks. When you buy a home with cash, no lender is involved, so all you must wait on is for the escrow company to do a title check and complete the paperwork.
How long it takes to close on a house depends on a few factors. Some of which are out of your control, such as repairs not being performed on the home or having an inexperienced loan officer.
Make sure you respond to all requests promptly and that you have all mortgage documents submitted as soon as possible, preferably at the same time you turn in the purchase contract.
The average time it takes to close on a house in 2017 is 46 days. Make sure your Realtor gives you at least a 46-50 day window to be prepared and ready for closing.
Want to make sure you choose the right lender and don’t have any closing delays? Please speak to our lenders and get a home loan quote today.