Prospective home buyers might do well to begin the process of obtaining a mortgage earlier than they think. While most experts say the average time it takes for buyers to obtain their mortgage is around 30 days, that's far from true in many cases.
“Today’s mortgage process is very involved, particularly with regard to the documentation required, third-party verifications, and the independent appraisal process,” said Whitney Fite, president of Angel Oak Home Loans in Atlanta. “All of these moving parts can cause a delay in processing if an issue arises.”
The mortgage application process involves several stages, including pre-approval, a home appraisal once your bid has been accepted, and then receiving the actual loan. But during certain, busier periods, consumers may have to wait a while longer. Depending on the lender, the waiting period could be as much as 60 days, reports Realtor.com.
As such, consumers might do well to get an early start in the mortgage application process. They should approach a lender for pre-approval the moment they start getting serious about buying a home. Indeed, many sellers require pre-approval before even considering an offer.
For a preapproval, lenders will check the consumer’s credit rating, debt-to-income ratio, and other financial information. That alone may take a week or even longer, depending on the borrower’s circumstances.
But buyers shouldn’t confuse a preapproval for having an actual mortgage loan. Borrowers still have to apply for the actual loan and also get through the appraisal process. Also, in the underwriting process, lenders will review all of their financial information and ensure the home buyer has not made any false or misleading claims on their application.
Fite says the most common reason for a mortgage-related delay is the borrower not turning in documents in a timely manner.
“The best advice I can give someone buying a home is to prepare to respond very quickly for any and all documentation requests,” Fite says.