How Long Does It Take to Close on a Home? 

When you buy a new home, whether it is a new construction home or a resale home, you are understandably excited and you probably want to move in as soon as possible. However, once you sign the paperwork for the purchase, you are not automatically handed the keys. Instead, it takes time to close the sale.

 

How Long Does It Take to Close on a House?

When buying a home with cash, you can have a quicker closing, sometimes within a week. However, few people purchase a home with cash, instead relying on a loan of some type to finance the purchase. The type of loan will determine how long the closing will take. According to Ellie Mae, this is as follows:

  • Conventional mortgage – 48 days
  • Federal Housing Association (FHA) loan – 54 days
  • Veterans Affairs (VA) loan – 55 days

 

The Closing Process on a House

The closing process on a house has a number of steps in the homebuying process that must be followed to ensure the purchase of a house goes through. This process is the key reason for how long it takes to close on a house. Here are the steps of the closing process:

  1. You will apply for your loan, which take about a day and can be done as part of the preapproval process.
  2. Your lender will provide you with the terms of the loan, which will include the amount of the monthly payments and any related closing costs and fees. This is typically done in less than a week.
  3. You will provide your lender with all the documentation they require to approve your loan, including proof of income and assets. This typically takes less than a week.
  4. An appraisal of the home you are purchasing will be ordered by the lender. This takes one to two weeks and allows the lender to determine the value of the home.
  5. Underwriters will take one to three days to evaluate all the documentation you provide and ensure you meet all the required guidelines for approval.
  6. You will be given conditional approval, but you may need to provide additional documentation. This process typically takes one to two weeks.
  7. You are cleared to close the sale, which means that you have been given your final disclosure of terms. Once this happens, you must wait three days before you can sign off on everything, during which time you should review the terms of your loan, with a professional if necessary.
  8. You close the purchase by signing off on it, after which there will be a final review done and your mortgage will be finalized and recorded within the county of residence.

 

What to Expect on Closing Day

When the anticipated closing day comes, the closing process typically takes only an hour or two. Keep in mind you will need to bring with you a form of photo ID, a certified cashier’s check, and a copy of your Closing Disclosure. You will then sign the following documents:

  • The promissory note that includes the terms of your loan and is the official agreement you make to repay that loan.
  • The mortgage note that includes the terms of your mortgage.
  • The deed of trust that gives your lender the right to sell or foreclose on the property should you be unable to pay off your loan.
  • The escrow disclosure that includes the details of your escrow account and the amount of fees and taxes you will need to pay each month.

 

On closing day, you will also need to pay all the closing costs associated with the purchase of your property, including:

  • The loan processing application fee
  • Fees for the closing appointment
  • The loan origination fee
  • One year’s worth of homeowners insurance
  • Home inspection fees
  • Title insurance coverage

Finally, at the closing appointment, you will transfer the title of the home into your name. This is the official step that makes you the homeowner.

 

Reasons Closing a House Could Be Delayed

Finally, it is good to be aware of the reasons your closing could be delayed. One of the most common reasons is issues with the appraisal, particularly if the property value is appraised at lower than the selling price. The bank will either get a second appraisal done or expect the seller to lower their price. Other reasons the closing could be delayed include:

  • Not having your documentation ready when required
  • Having unpaid debts
  • A loan application that is incomplete
  • Problems with the buyer’s credit report
  • The buyer not depositing the down payment in the proper account with enough time for the funds to be traced
  • Liens on the property
  • Complications that result from the title search conducted by the title company
  • The final walkthrough revealing repairs that were not completed by the seller as agreed upon

 

Ultimately, the quicker you can close on your house, the better. A faster close will save you stress and can also save you from having to pay additional fees to lock in your mortgage rate.

 

To find out more about how long it takes to close on a house or other aspects of the home buying process, talk to a Centex team member today.

 

Looking for more Foundation tips and learning? Return Home here.

Published 01.27.22

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