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S To Speed Up Your Mortgage Closing
When your mortgage loan is submitted for approval to a bank, there are roughly seven separate steps in the loan application process. What follows is a brief explanation of each step, and what you might be able to do to speed your loan along.
Note: For best results, the first three steps can and should be completed prior to shopping for a home.
Step 1: The initial mortgage application
When you give a mortgage application to your lender, its either completed inperson, by telephone, online, or via an app.
Completing a mortgage application, if youre prepared, will take 20 minutes to an hour.
Prepared means having:
- Your employment and address information for the most recent two years at the ready
- Your employers and landlords contact information handy
- Your bank statements along with retirement and investment account statements
- Proof of your income, which may be via pay stubs or tax returns, so the lender can determine your debttoincome ratio
In many cases, after taking your application, a lender will be able to offer a preliminary approval.
This means your loan is conditionallyapproved assuming you can support the information provided above with supporting paperwork and documentation.
Step 2: Provide supporting paperwork & documentation
After it issues your preliminary approval, your mortgage lender will ask you to provide paperwork to document the information youve shared as part of your application.
Loan Processing Takes Over
Time: 2-3 weeks
Every statement you made on your mortgage application goes under the microscope in this stage. Brace for questions and document requests. Responding promptly keeps everything moving forward.
You said you make $50,000 per year at Acme Software? The processor looks at your pay stubs and calls Acmes HR department to verify. You said your self-employment brings in $65,000 per year? The processor pulls your tax records to confirm.
Time: 24-48 hours
Your job now is to sit tight. If youre needed at all, it will be to answer more questions and produce more documents.
The underwriters job is to judge the risk of lending money to you on this property. Whats your loan-to-value ratio? Do you have the cash flow to make the monthly payments? How about your credit character? Whats your history of making payments on time? Is the home valued correctly, the condition good and title clear? Is it in a flood zone?
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How Long Does A Tsb Mortgage Application Take
A TSB mortgage application can take as much as 3 weeks to process but some TSB mortgage applications can take as little as one week. The time it takes for a TSB mortgage application will heavily depend on the type of mortgage and the specific circumstances of the borrower.
A TSB mortgage application could also take as little as 24 hours. It all depends on the type of TSB mortgage and the strength of the TSB mortgage application which is made.
If you use a mortgage broker who has some experience of dealing with TSB and making TSB mortgage applications then the TSB mortgage application may take shorter than usual as the mortgage broker may know what sort of documents TSB may require, how to prepare the TSB mortgage application, if you are likely to be accepted for a TSB mortgage and may even be able to give you a guide on how long a TSB mortgage application takes based on their own experience.
A mortgage broker who has experience with making TSB mortgage applications may also have working relationships with underwriters from TSB and hence be able to chase up your TSB mortgage application as well as get more concrete guidance on how long your TSB mortgage application should take.
Locking In Your Interest Rate
Since interest rates fluctuate frequently, things can change between the day you apply for your loan and the day you close. If you want to protect yourself against rising interest rates and ensure that the loan terms you used to build your budget are locked, you might consider locking in your rate with your lender when you fill out your loan application.
A rate lock, also known as a rate commitment, is your lenders assurance that the interest rate and discount points are guaranteed until the rate lock expiration date. The lender will provide the terms of the rate lock to you in writing, including the agreed-upon interest rate, the length of the lock and any discount points you choose to pay. Learn more about discount points
Of course, if you believe that interest rates will decrease in the near future, waiting to lock your rate may make sense to you. In the end, its a personal choice when to lock your rate. The rate must be locked prior to the lender preparing your closing documents. Talk to your lender about the choice that best suits your needs and your preferences.
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Stages Of The Mortgage Application Process
Your lender will need to carry out a valuation on the home you are buying and look at your finances before approving a mortgage. A valuation from a lender is different to a survey, which youll arrange yourself.
To apply for a mortgage, you also have to go through a few stages. These are:
- Mortgage interview. Before or after you apply for a mortgage, you meet with the lender or Mortgage Broker, either face-to-face or over the phone. They will ask you about your monthly spending, current debt, and commitments, plans and personal circumstances.
- Your lender will assess your credit rating and history to check you are a trustworthy borrower.
- Home valuation. To make sure the house is worth its sale price, the lender will value your new home.
When these stages are complete, you may have your mortgage approved. Learn more about how to apply for a mortgage.
A few factors can hold up the mortgage approval process:
- A poor credit score. Lenders may deny your mortgage request until you improve your credit rating.
- Full Buildings Survey. Any structural problems or big repairs may need fixing by the seller before your mortgage approval.
- Missing details. Not providing enough or the right ID, payslips, proof of deposit or earnings can delay the process.
- Property chain problems. If the seller, buyer of your home or someone else in the chain pulls out, it can slow down or cause the move to fall apart.
Dont Get Preapproved Too Far In Advance
When you receive your preapproval letter, itll probably say its good for 30 to 90 days. Since thats a relatively short period, youll probably want to wait to get preapproval letters until youre ready to start seriously shopping for a home. And remember, a preapproval is only a conditional approval. If you rack up more debt, change jobs or reduce your savings, you could get denied when you go to get final mortgage approval.
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How Long Does It Take To Get A Home Valuation Done
It can take around two weeks to carry out a home valuation. The surveyor has to arrange a date, do the survey and write their report. Then, the mortgage lenders underwriter will review the report to check the value is accurate and there are no issues.
When your lender reviews the home valuation and is happy with it, you may be close to being approved
How Long Does The Offer Last
Standard mortgage offers are valid for up to six months. A re-mortgage, on the other hand, is can last up to three months. Nevertheless, some extend the offer to six months. The difference in validity periods lies in the fact that purchases typically take longer from application to completion.
Some lenders instead have a completion deadline rather than a time limit. Going past this deadline will still allow access to the lender for a mortgage but you will go under reassessment. Normally, this may mean starting all over again from scratch. If your circumstances have changed, lenders can offer you a new deal.
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How Long After Valuation To Mortgage Offer
A valuation is undertaken in order to confirm your property is correctly priced and is in suitable condition for mortgages to be taken out against it.
Once independent estate agents or a surveyor have completed the valuation, then your solicitor will let you know if you have an offer. Typically, offers for mortgages after valuation take around 5 working days to come through.
Can I Pay Extra Toward The Principal On My Loan
As long as your mortgage or Fixed Equity Loan payments are up to date, you can pay extra toward the principal of your loan. When making your payment online, select the Additional Principal and Escrow option and enter the amount you wish to pay.
You can also pay extra toward the principal of your Home Equity Line of Credit. Your additional principal payment must be submitted after the current months payment is satisfied and before the next months bill is generated, which usually occurs on the fifth of each month. The bills can generate earlier if the fifth falls on a weekend or holiday.
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Apply For The Full Mortgage
Once you have found the home you want to purchase, you will need to put your offer in.
You can now also apply for the full mortgage application, which should not take too long, with average times stretching between 18 and 40 days as we explained earlier. But it could take longer as there might be complications along the way.
Mortgages arent as easy to come by these days due to changes in the regulation. Lenders are far stricter about how they assess applications and affordability.
They will want to be 100% certain that you can afford the repayments and will look into your financial information in a lot of detail.
However, if you already have a mortgage in principle, a lot of this information will already be readily available to them and will be documented with the support of your adviser.
Once all of your paperwork has been assessed, it will be approved if proven to be legitimate and you can afford the mortgage.
The next stage involves a surveyor valuing the property you want to buy. Its a legal requirement and is designed so the lender can be sure the property has enough security in it to cover the amount of the loan.
The survey is only a few pages and will report back on things like:
- Type of property
How Long Does Completion Normally Take
The completion date is the day you have been waiting for- when you finally become a homeowner! It occurs once contracts have been exchanged and your mortgage finalised.
For completion to occur, your solicitor will let your lender know that a moving date has been agreed upon. Then, you will normally wait around a week to receive funds. So, all in all you can expect exchanging contracts and reaching completion to take around a month.
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How Long It Takes To Get A Pre
How long it takes to get a pre-approval depends on the situation and lender. In general, lenders require certain documents to verify your finances such as your W-2s and bank statements as well as identification and employment verification.
Theyll also evaluate your debt-to-income ratio , run a hard credit check to get your credit score, and look for any red flags on your credit report.
Some of the factors that can impact how long it takes to get pre-approved include:
- How long it takes you to gather supporting documents
- Whether there are mistakes on your credit report that need to be fixed
- Your employment status
- Unusual circumstances involved with your assets
Having all of the required documents on hand before you start can also help speed up the process.
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What Can I Do To Accelerate My Application
Most people asking how long does it take understandably just want to move in as soon as they can.However, there is no set way to speed up how long it takes. That said, there are a few things you can do to try and make the mortgage application process quicker:
- Get mortgage advice from a mortgage broker. A mortgage broker helps ensure you get your mortgage application right, first time. This reduces your chances of errors and having to reapply.
- Being prepared for your appointment with your mortgage broker. To speed up the process further, go to your mortgage broker prepared. Take all the documents they will want to see, such as bank statements for proof of income and current address.
- Get a mortgage agreement in principle.
Another helpful tip is to start applying for mortgages before you start serious property hunting. This saves time, since it shows you what you can afford/borrow. It also means that the process of buying your new place is not delayed due to complications in getting a mortgage.
“A mortgage broker can give invaluable mortgage advice when buying a home. Their service can be especially important if you are a first time buyer, or want to speed up the process of getting a mortgage.”
Help & Advice
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How Long Does It Take To Buy A House On Average
The good news is, depending on your location and finances, you could be in a new home in 5 6 months. Itll take less time if youre buying a home with cash. It might take a little longer if youre buying while selling your current home.
Better news still you can take steps ahead of time to shorten that period. Best news yet you can do most of the work from your couch.
Lets take a closer look at the steps to buying a house. But first, heres what you should do before you even start looking to ensure a streamlined and efficient process.
Take the first step toward the right mortgage.
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How Long Does A Mortgage Application Take To Be Approved In The Uk
In the Uk, a mortgage application can take on average between 18 and 40 days to be approved but this all depends on the circumstances of the borrower, the strength of their mortgage application, the type of mortgage they are applying for, the complexity of the mortgage application and the average speed of the mortgage lender.
As mentioned previously, a TSB mortgage application can take about 1 week on average to process and be approved.
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How Long Will It Take For Your Mortgage To Complete
The day for picking up your keys and moving into your new home is nearly here. Once you have exchanged contracts your solicitor will arrange with your lender to draw the funds down so that you can complete and officially own your new home.
The time between the exchange of contracts and completion can vary as it is decided by the owner and buyer. The quickest possible time from exchange to completion is 1 week, as it takes this long for the solicitor to give notice to your lender that they require the funds to complete. The average time between the exchange of contracts and completion is 4 weeks. Occasionally it could take longer.
What time on completion day will I be able to pick up the keys?
Youve learnt how long a mortgage takes but when can you expect to actually get your keys. This really depends on where you are in the chain and how long the chain is.
- Empty Property If you are a buyer who is purchasing an empty property, then the completion will be quick and there is no reason why it cant be before lunchtime.
- Chain The higher you are up the chain, the later in the day it is likely to be. When the chain is very long completion can be as late in the day as 4pm.
A Word About Home Closing Times And Rate Locks
When you finance a home using a mortgage, your interest rate is based on timetoclose the fewer days it takes to get you from rate lock to closing, the lower your mortgage rate will be.
This is true for purchase mortgages and for refinance loans, too.
For every 15 additional days it takes to close your loan, in general, your quoted mortgage fees increase by 12.5 basis points .
The fewer days it takes to get you from rate lock to closing, the lower your mortgage rate is likely to be.
However, you dont get the liberty of choosing the shortest possible mortgage rate lock, then extending 15 days at a time as needed.
At the beginning of the mortgage approval process, mortgage lenders require borrowers to state for how long theyd like to lock their loan.
The typical mortgage rate locks last for 30 days, 45 days, or 60 days with extended mortgage rate locks available upon request.
Ideally, borrowers should choose the shortest rate lock period that allows the lender to complete the loan process and, for the purchase of a home, that extends through the homes closing date.
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