What is the Total Time it Takes to Close on a Home?
There is no one answer to this question, as the total time it takes to close a home varies. For the most part, the lender sets the duration of time it will take to process the mortgage loan and supply the funding to complete the transaction.
Exceptions to that reduce or increase the “average” time expected to processes the sale include instances where the buyer is paying with cash (and there’s no need to wait on the loan process) or the title insurance agent finds a fatal error in the property’s title making it impossible to transfer claims of ownership on the specified deadline, which often result in closing delays.
The closing process is not so easily hurried along by the buyer even if it is requested, as some titles, defects, and conditions can be tricky and take time to remedy.
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Things that affect the time it takes to close a home
Meeting the Conditions of the Sales Contract
The first thing that must be accomplished to prepare a piece of property for transfer is making sure all the conditions of the sales contract have been met. It’s not uncommon for repairs to be ordered by the mortgage lender before completion of the sale. Other conditions that may apply to the original sales contract stem from the title of the home. Depending on whether or not the home has been updated, recently documented, or comes with any common title issues, meeting the conditions of the sales contract can quickly complicate the process.
Confirming Seller’s Conditions Have Been Met
During the final inspection and appraisal of the property, the accuracy of the legal description of the home is confirmed along with the total value. The homebuyer usually conducts the final walkthrough and inspection while the lender orders the appraisal of a property to confirm the investment worth and the accuracy of the loan value.
Loan Approval and Homeowner’s Insurance Policy
Once the buyer is able to provide evidence of a deposit on the homeowner’s coverage, homeowners liability, or regular homeowners coverage, the lender is able to approve the loan. Upon approval, the homebuyer and seller must sign the escrow instructions, the seller must sign a notarized deed conveying the title, and finally the buyer must sign the notarized deed of trust and the executed promissory note. Once the homebuyer has signed all these important loan documents, the funds from the lender may be sent. Following the sending of funds on closing day, the down payment and funds are transferred to the seller. After closing, the final title policy is paid for with closing funds and issued naming the lender as a named additional insured.
Things You Can Do to “Speed Up” the Closing Process
There are a few things homebuyers and lenders can do to speed along the closing process. The first thing a homebuyer can do is get pre-approved for a certain loan amount before completing your search. This will assure that you don’t let your dream home slip through your hands simply because you weren’t quick enough to get approved. This means that a buyer will already know how much they can spend before the lender ever draws up a purchase contract for the desired home, which puts your lender one step ahead of the game.
How Long Does it Take to Close on a Home?
If you’re a homebuyer who is already pre-approved for a mortgage loan, then the homebuying process can take as little as one to two weeks. This is because the buyer’s employment, credit reports, and bank accounts are already verified from the start. However, one missing document can still delay the entire closing.
Most types of federal mortgage loans can be closed in within 30 days, and first-time buyer programs take 35 to 40 days to make closing day. That’s because some specialty loans require a two-step underwriting process.
Are you ready to speed up the closing process?
When you need a quick turn-around-time, try a reliable title insurance agent. Bay National Title Company is dedicated to a better closing experience. Call today to learn how to take advantage of Same Day Closing Disclosures.
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