How long does it take to close a mortgage? Timeline to close

Gina Pogol
The Mortgage Reports contributor

Average mortgage closing times are just that — averages

The typical time to close a mortgage ranges from 45 to 60 days. 

This is the amount of time it takes from loan application to “loan funding” — which is when the new home or refinance loan is officially a done deal.

Depending on your loan type, credit profile, and loan purpose (purchase or refinance), your mortgage might close faster or slower than average.

If you have not yet applied, or if you have not found the right home to buy, your closing time frame could be longer.

Start your mortgage loan approval (Jul 27th, 2021)

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How long does it take to close a mortgage?

According to loan software company ICE Mortgage Technology, it took 52 days to close a mortgage as of March 2021. But the time to close can vary a lot depending on your circumstances.

The time it takes to close a mortgage depends on where you are in the home buying or refinance process.

The home loan process itself — from application to closing — generally takes between 45 and 60 days. If you’re refinancing a home you already own, that’s your entire timeline.

If you’re buying a new home, though, you have to factor in the house hunting process.

You need an offer accepted to get approved for a mortgage – so you can’t start the process in full until you’ve found the home you want. This could add an additional 1-2 months or more onto your timeline.  

How long a mortgage closing takes if you haven’t found a house yet

Closing on a house takes time. Exactly how much time depends on your “starting point.”

If you haven’t yet found your dream home, you could spend a month or two just visiting houses with a real estate agent.

Once you find the house, it could take one to five days to make an offer, have the seller look at your offer, negotiate, and come to an agreement on price and other aspects of the real estate transaction.

At this point, you can make full application for the home loan. (You couldn’t apply earlier because a lender can’t issue loan approval until you’ve chosen a home.)

You can speed up this process by getting a mortgage pre-approval as soon as you start looking at homes. Don’t let that 30 to 60 days go to waste.

Getting pre-approval means the lender gives a thumbs-up to all aspects of your home loan besides the property. Once you have an accepted offer, your lender already has a serious head start on your final approval.

Start your mortgage pre-approval (Jul 27th, 2021)

If you have found a house to buy: How long does it take to close the mortgage?

If you’ve found a home already, it will probably take between 45 and 60 days to close the home mortgage, based on national averages.

Keep in mind your situation can vary widely depending on your credit score, employment history, and other aspects of your financial life.

You can speed things along by preparing for the seven steps of underwriting described below.

In today’s market, the appraisal report can be a major sticking point. Due to regulations, many appraisers left the business after the housing downturn in the late 2000s.

This can make appraisers harder to come by today. Ask your lender about current appraisal turn times based on recent history.

One bright spot: Fannie Mae and Freddie Mac can waive the appraisal requirement, even on some purchase loans. This is helping closing times.

But you can’t count on that. Be careful not to over promise closing speed to your seller. Your purchase agreement will state a closing date. You are expected to stick to it, or potentially lose the house and your earnest money.

Above all, have an honest conversation with your loan officer about how long it’ll take to close on your mortgage loan.

Ask for a realistic or even pessimistic assessment, factoring in underwriting, processing, the appraisal, condition review, and closing/funding.

It’s better to guess “long” than to have overly optimistic time frames you can’t reasonably hit.

How long after the appraisal to close a mortgage?

If your appraisal is complete, congratulations. You’ve finished one of the longest steps in the home buying process.

You might be wondering how much longer you’ll have to wait.

Typically, mortgage underwriters will be working on your approval while the appraisal is underway. So when the appraisal comes in, the lender should be more or less ready to go.

It shouldn’t take longer than two weeks to close on your mortgage after the appraisal is done.

It shouldn’t take longer than two weeks to close after the appraisal is done.

That’s not a promise, though. There are still plenty of potential hang-ups.

Your lender could find an issue on the appraisal (peeling paint, a roof in need of repair, etc.) that needs to be addressed. Or the seller might have a problem with the home he or she is purchasing, delaying the sale.

But don’t let those items worry you. They happen frequently and are usually resolved in one way or another. Still, be vigilant with your lender. Make sure it is speeding your file through the rest of the loan application process.

Mortgage closing times by loan type

The type of loan you get can make a difference in your closing time. ICE Mortgage Technology breaks out average closing times by loan type:

  • Conventional loans: 51 days
  • FHA loans: 55 days
  • VA loans: 57 days

Keep in mind closing times vary widely depending on the situation. A cash buyer, for instance, might close in a matter of days. A mortgage borrower with a questionable credit history and income may need 60-90 days or longer.

If you’re trying to close on a home fast, apply for prequalification with your lender as soon as possible — even before you find a home.

A word about home closing times and rate locks

When you finance a home using a mortgage, your interest rate is based on time-to-close — 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 (0.125% of the loan amount).

The fewer days it takes to get you from “rate lock” to “closing,” the lower your mortgage rate is likely to be.

However, you don’t 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 they’d 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 home’s closing date.

Start your mortgage loan approval (Jul 27th, 2021)

What affects mortgage closing times?

According to ICE Mortgage Technology, it now takes an average of 52 days to close on a new home loan. That’s an average of purchase and refinance transactions.

Current closing times are down from 58 days at the end of 2020.

Still, it takes longer than most consumers think to close a loan. That means home buyers and refinancing households should plan for longer mortgage rate locks than they initially expect.

Remember: Mortgage rate locks move in 15-day increments — and it now takes more than 50 days, on average, to close on a home loan.

There are a number of reasons why loans can take longer than 45 days:

  • Mortgage lenders trimmed staff as rates rose through 2018. Now that rates are so low, they are scrambling to hire employees to process loan files
  • Lenders in many states are still dealing with stay-at-home orders from the COVID-19 pandemic
  • A home-buying frenzy is sparking a wave of purchase applicants to buy
  • Rising rents, too, are lighting a fire under home buyers

All this is creating a crush on mortgage lenders who, frankly, have been unprepared to handle the workload.

Despite technological improvements, banks sometimes can’t keep up with demand.

Regulations slow down mortgage closings

There’s another reason why loans are taking longer to close: the TILA-RESPA Integrated Disclosure laws, which went into effect toward the end of 2015.

The gist of TRID is that mortgage lenders must send particular paperwork to mortgage borrowers 72 hours prior to closing, and that changes to any of the documents require a re-disclosure of said terms and another 72-hour waiting period.

Since October 2015, then, closings have had an additional three days tacked on; a government-mandated delay affecting all closed loans.

You’ll want to check with your lender when choosing the length of your rate lock. Shorter locks are ideal, but not always available.

7 steps 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, it’s either completed in-person, by telephone, online, or via an app.

Completing a mortgage application, if you’re 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 employer’s and landlord’s 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 debt-to-income ratio

In many cases, after taking your application, a lender will be able to offer a “preliminary approval.”

This means your loan is conditionally-approved — assuming you can support the information provided above with supporting paperwork and documentation.

Start your mortgage loan application (Jul 27th, 2021)

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 you’ve shared as part of your application.

Typically, this paperwork includes pay stubs, W-2 statements, federal tax returns, and account statements for your savings and retirement accounts.

Other documentation requests may include copies of business licenses, gift letters for down payments, and proof that a student loan is in deferment.

After reviewing the paperwork, your mortgage lender may ask for additional supporting information, which may include written explanations for “large, atypical deposits” in your bank account or anything else.

Reviewing your loan paperwork is a task typically completed within two days, but it can sometimes take as long as a week.

In general, the faster you comply with your lender’s request for paperwork and supporting documentation, the faster your file can be processed.

Step 3: The credit approval letter

Once the lender has reviewed and “signed off” on your paperwork, it will issue a pre-approval letter to you.

A pre-approval letter is your proof that your loan can be approved, so long as the property you purchase meets lender guidelines, and so long as you don’t make any “material” changes to your application.

Material changes include a change in employment, income, credit, marital status, or down payment.

Changes in your application don’t necessarily nullify your approval. However, they do require that your loan get re-underwritten and re-approved.

This could lengthen the closing process considerably. So avoid making any financial changes prior to closing, if at all possible.

Start your mortgage loan pre-approval (Jul 27th, 2021)

Step 4: The home appraisal

As the next step in the mortgage approval process, your mortgage lender will schedule a home appraisal.

For home buyers, this step won’t happen until after a home has been chosen and after the home inspection has been completed.

Refinancing homeowners who choose an FHA Streamline Refinance or VA Streamline Refinance won’t need an appraisal.

Appraisals can take up to a week to complete, depending on the property. It may take a week just to get on an appraiser’s schedule.

Therefore, when it’s time to schedule the appraisal, try to schedule it as soon as you possibly can.

Every day counts when you’re trying to preserve a rate lock, so if the appraiser wants to come see the home tomorrow morning, find a way to make that possible!

Step 5: The lender’s review of the home appraisal

After the appraisal is completed, the lender will “double-check” it for validity.

In general, mortgage lenders’ appraisal review process is lax — the appraiser is the expert, after all.

However, if the appraised value of the home is more than a few percentage points higher than the lender’s expectation for what that value should be, the lender may ask to commission a second, verifying appraisal.

Scheduling this second home appraisal can add another week to your closing, which can increase your mortgage rate and closing costs. This is a rare occurrence, however.

Most times, lenders will accept the appraiser’s valuation of a home as-is, and will issue a “final approval” which states the loan is approved subject to certain closing conditions.

As the borrower, your closing conditions may include finalizing your homeowners insurance policy, depositing your down payment into an escrow account with the title company, and signing your final set of mortgage documents.

Step 6: The mortgage loan closing

After the lender has issued its final approval, the only thing left to do is to close on the mortgage. However, until the closing has completed, it’s your duty as the borrower to not change anything which could affect your mortgage application.

For example, between your final approval and your closing, don’t quit your job, don’t buy a car, don’t put furniture on layaway, don’t apply for a credit card, and, most importantly, don’t miss any monthly payments to a creditor.

Any of these events could cause your approval to be revoked. Only after your loan is funded and money has changed hands can the loan be considered final.

Step 7: The rescission period (for refinances only)

For refinance loans of a primary residence, the closing doesn’t mark the end of the mortgage loan process — there are another three business days during which the loan can be canceled.

These three days, known as the Rescission Period, are a borrower’s right. They give homeowners a chance to change their mind and cancel the loan entirely.

The three-day Right to Cancel cannot be waived and must be figured into the mortgage rate lock period.

Mortgage closing FAQ

How long after appraisal does it take to close?

About two weeks, typically. But this isn’t a promise. Your mortgage underwriting process could take longer if you have a low credit score or are self-employed and need to submit tax transcripts to document your income. It’s also possible a lender could ask for a verifying appraisal, delaying closing by a week or more.

How many days before closing do you get mortgage approval?

Federal law requires a three-day minimum between loan approval and closing on your new mortgage. You could be conditionally approved for one to two weeks before closing.

Can you close on a house in two weeks?

If you’re a cash buyer, you could close on a house within a few days. Closing on a mortgage loan will take longer — almost two months on average.

Can a loan be denied at closing?

This is rare but not impossible. To avoid this possibility, don’t make any changes in your financial life between making an application and signing the closing papers. Significant changes to your credit history or income could threaten your approval. It’s also possible new disclosures about the property itself could change the lender’s mind about your mortgage. Be sure you’ve read and understand your home inspector’s report before closing. 

Will I know the amount of my mortgage payments before closing?

You can get a pretty good idea of your monthly mortgage payments before closing. But remember, your monthly payments will include more than just repaying the loan and interest.

For most homebuyers, monthly payments also include: Property taxes — Mortgage loan servicers collect your property taxes along with your loan payments and then pay your local taxing authority annually; Homeowners insurance premiums — A portion of your monthly payment will also go toward your homeowners insurance annual premiums; Mortgage insurance — Unless you make a 20% down payment on a conventional loan, or are a veteran who qualifies for a VA loan, you’ll owe mortgage insurance premiums each month.

These charges vary by loan type and property location. Your Realtor or mortgage broker could help you estimate your overall costs before closing.

What are today’s mortgage rates?

The faster you can close on a mortgage, the lower your mortgage interest rate can be. Know the steps in a mortgage approval, and where you cut time and corners to get to closing quicker.

Get started on your mortgage application as soon as possible to have better chances of a fast home loan closing.

Verify your new rate (Jul 27th, 2021)