Home shoppers may need to plan for more time than they realize when they’re starting the process of obtaining a mortgage.
“Today’s mortgage process is very involved, particularly with regard to the documentation required, third-party verifications, and the independent appraisal process,” says 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 entire process encompasses getting preapproved, a home appraisal, and getting the actual loan. Typically, the process takes about 30 days, on average, Fite says.
However, in busier times of year, consumers should expect a longer wait. For example, a duration of 45 to 60 days, depending on the lender, may be more of the norm, according to a recent article at realtor.com®.
Consumers may be best off making sure they get an early start to the mortgage process from the moment they even start thinking they may want to purchase a property. Many sellers require buyers now get preapproved for a mortgage before they’ll even accept 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.