Buying a house? You might be wondering how long it’ll take.
The timeline we’re going to cover today starts from when you go under contract to when you’re at the closing table and call the property home.
Generally, this process takes about 30 days. Right now, with the current housing environment we’re in, it’s taking a little bit longer.
So I wanted to walk through the 3 main components that determine that timeline.
1. The first main component is underwriting. Underwriting is the review and approval of all the components of the loan. Parts of this review include your income, employment, assets, and then property details like insurance, appraisal, and title. Though this process takes place behind the scenes, you’ll still be involved and possibly messaged for additional documents. This is the lender’s way of assessing the risk of approving your loan so you do not close on a mortgage you can’t afford.
Typically each time the underwriter is working on your file, it’s going to be a 24-72 hour review time.
2. The next component is the appraisal. This is when a real estate appraiser provides an objective estimate or appraisal of the value of the property. They do this based on a visual inspection, recent sales of similar properties, the market, and the features of the home. The appraisal can begin between 1 to 4 days after you go under contract. Once that order is placed and accepted, you can expect the appraisal to take 2-3 weeks before the report is returned. Typically, the borrower pays the appraisal fee, which can be a few hundred dollars based on the location. If the appraisal value is lower than expected, this can delay the entire process.
The longer timeline is not preferred but it is largely due to the current market and the capacity appraisers are at right now. Keep in mind, once that appraisal is in, it also still has to be reviewed by underwriting in that 24-72 hour review time.
3. The third component that sets the timeline is the Title Work. This is when the attorney or title company does a title search of the home to make sure the title is free and clear and the seller can sell the home. For example, it’s important to verify there are no liens or encumbrances against the property.
Typically, once that order is placed, about 1-3 days after you go under contract, that order takes 2-3 weeks to be returned to the lender to be reviewed and approved by underwriting.
It still is possible to close under 30 days, but having that conversation before going under contract is important to make sure the timeline is reasonable for your scenario and all parties are on the same page. That way, it can be a smooth process.
If you have any additional questions about the timeline to close or securing a loan for your home purchase, you can contact me by emailing (rebecca.richardson@wyndhamcapital.com) or finding me on instagram (@the.mortgage.mentor).