You must have sent a letter from your employer confirming your job status, or you must have passed across the recent two paychecks that you received. You also must have provided some copies of the tax you have paid over the last two years, but the question left is, how many days before closing do you get a mortgage approved?
The answer, however, depends, and even though we must have seen an advert from lenders claiming that the application process is straightforward, it isn’t really as easy as they claim it is.
Just because you finally submitted your loan application doesn’t really mean you would get an instant response from the lender. In recent reports, statistics have shown that it would take mortgage loans an average of about forty-nine days for the borrower to get a response.
These same reports also showed that it would take an average of fifty-one days on mortgage refinances to close and an average of forty-seven days for purchase loans. The truth is there are lots of factors that make mortgage loans take this long.
There is something called the underwriting process, which involves mortgage lenders trying to figure out if you would be a good or profitable risk for a mortgage loan. If you do not provide the necessary documents used by the lender to verify your savings and income, this process would definitely get delayed.
If there are marks on your credit report like missed or late payments, this process can get delayed.
How Many Days Before Closing Do You Get Mortgage Approval
If there is missing paperwork, then the application process would eventually slow down. For example, your lender asks you to provide proof of tax payment for two years, and you end up providing one, then your lender is going to hold on to the fact that you did not provide the complete paperwork and delay the application process.
Until this paperwork is provided, you would pause the underwriting process, so you mustn’t ignore any paperwork your lender asks you to provide.
The documents that lenders ask for are mostly for verification and not for fun because they want to tell to a certain extent that you can afford the monthly mortgage payment. Ignoring this paperwork request would only result in dragging the application process for a longer period of time.
With that being said, it is now clear that the time frame for the application process is team efforts, so working quickly and efficiently when it comes to providing documents would hasten the application process.
Furthermore, if you can provide all the necessary paperwork and your credit card has no blemish, then your lender might take up to seventy-two hours to respond to your loan application. However, this approval isn’t the final approval because what your lender is issuing you at this point is what is called conditional approval.
After this point, your lender would ask you to provide more documents that would be useful in backing up your claims before you would be granted the final approval.
Whether you want to refinance a mortgage that is already in use or you want to buy a home, you should be willing to wait for an appraisal of the property you want to get or refinance gets completed if you want to buy. Proof of ownership document needs to be provided as well.
The last steps, most importantly the appraisal steps, can rack up an additional two to three weeks before you get the final approval. The initial underwriting process is speedy, provided you have the right paperwork to speed up the process.
Summary – How Many Days Before Closing Do You Get Mortgage Approval
However, if you have credit card issues, then the application process doesn’t just get slowed down, but you are likely to pay high mortgage rates. It is likely to happen, especially if the account in question here is in dispute so before applying for a loan, make sure that all three accounts are well checked and are in line with the creditor’s demands.
Upon resolving the dispute, the creditor would still need to run through the credit card again to ensure that they finally resolved the dispute. All of these processes take up so much time.