“How Long Does it Take to Close on a Home?”
How Long Does It Take to Close on a Home?
Buying a house is exciting and overwhelming all at the same time. Not only must you find your dream home, but you must secure financing too, unless you’re paying cash.
The financing part causes a lot of stress for most people because they don’t know what to expect. One of the largest concerns I hear about is, how long does it take to close on a home?
My team and I have done closings in as little as eight days, but the time it takes to close takes many factors into concern. One thing is for sure - if you need a fast closing, it IS possible - don’t get discouraged!
How Fast can you Close?
When you sign a purchase contract, it’s natural to want to close right away. But it takes time. While it varies by lender, the national average is 48 days. With higher interest rates and a slow in the industry overall, you might see faster turnaround times, though.
The Loan Closing Process
You might wonder what takes so long to close on a home. It helps to understand the steps that lenders go through.
1. You get pre-approved before you look at homes. This allows the lender to review your credit score, income, assets, and liabilities. They use this information to make sure you qualify for any of their loan programs.
2. You work with a reputable real estate agent to find your dream home and sign a purchase contract. Once signed, you give the lender the contract along with any other conditions you can satisfy according to your pre-approval letter.
3. You open escrow. This is where you put money down in ‘good faith.’ This tells sellers you’re a serious and qualified buyer and are willing to risk your funds. A neutral third-party escrow company holds the funds until you close. (Title company or attorney.) Call us and we can talk more in detail about this: 321-972-6468.
4. The lender orders an appraisal and title work on the property. This information tells the lender if the home is a good risk. Is it worth at least as much as you’re paying? Is the title clear? In other words, is the chain of ownership legal and are there any outstanding liens aside from the seller’s current mortgage? This process could take a couple of weeks, but lately, as of Feb. 2023 at this writing, I have not been seeing it take that long with our borrowers.
5. Clear any outstanding conditions. At this point, to get to a clear to close, you must provide any straggling documentation the lender needs. Sometimes other issues come up when they review your paystubs, verify your employment, or look at your asset statements. Stay in touch with your loan officer team (us!) and provide documentation as quickly as possible. We have your back!
6. Close on your loan. Once you have the ‘clear to close,’ you’re free to close on the loan and take ownership of the home. You might do the closing in person, mail away, or mobile closing. Electronic is also possible, as well as power of attorney.
Final Thoughts
It’s always worth asking a lender what their turnaround time is, especially in today’s market. Some lenders are moving much faster than others. If you have a closing date that’s sooner than 30 – 45 days, make sure you find a lender that can work within that timeline. Like I mentioned before, my team and I can close in as little as eight days. Send me an email and we can chat about what you need: holly.ecimovic@edgehomefinance.com.
Related: What is an escrow waiver?