The Home Loan Timeline
We know that buying a home is one of the most important transactions of your life. We also understand that it can be one of the most complicated transactions in your life. For that reason, one of our primary goals at PacRes is to simplify the process as much as possible.
One of the first ways we simplify is to explain the overall timeline of the loan process. You need an accurate loan timeline so that you can plan the rest of your everyday life during your loan process. Although your timeline will vary depending on the loan type, lender, and other outside factors, this should give you a general idea of each step of the loan process, as well as approximately how long it should take from start to finish.
Before the Timeline Starts: Approval & Home Shopping
Before your official loan timeline begins, you should strongly consider obtaining a full approval from your Mortgage Advisor, rather than just a pre-qualification. At PacRes, we offer upfront approvals, which sends your loan through “credit-only” underwriting.
During this process, an underwriter will review and approve your loan package with just your credit, income, and asset documentation before you are in contract on a specific property. Obtaining an upfront approval will show sellers that your offer is serious and backed by a trusted lender, therefore increasing your buying power.
Once you have your approval in hand, it’s time to go house hunting! The amount of time you spend shopping will depend on the number of homes available in your community that meet your wants and needs, and how many other people are looking for a home in that area as well.
Make an Offer (Typically 1 Day)
When you find the home you want to buy, your real estate agent will help you complete a purchase agreement. The agreement is several pages long and outlines the terms of sale, which typically include the following items:
- Property address and legal description
- Sales price
- Down payment amount
- Inspection timelines
- Closing date
- Any items included in the sale, such as appliances
- Closing agent name
Negotiate Offer (Approx. 1-3 Days)
It may take a few days to hear back on whether your offer was accepted if the seller has received multiple offers. The seller can accept, reject, or submit a seller’s counteroffer. A counteroffer would contain their requested changes to the terms of the sale. If applicable, you can submit a buyer’s counteroffer. This process may go back and forth as many times as necessary until everyone has agreed on the terms and signs the contract.
Mortgage Application & Disclosures (Approx. 3 Days)
Now that you have a signed sales agreement, your Mortgage Advisor will prepare your official loan application and disclosures. Your disclosures will include a Loan Estimate, an important document that lists the estimated closing costs, prepaids, interest rate, and monthly payment for your loan. You will review and sign your application and paperwork. Your Mortgage Advisor will then send your loan for approval (or updated approval if the lender already approved the loan.)
Home Inspection & Final Negotiations (Approx. 3-5 Days)
Your home inspection appointment will take a few hours once it’s scheduled. The schedule will depend on the home inspector’s availability. If the home is currently occupied, the schedule will depend on the owner’s availability to allow the inspector inside.
Once your inspections are complete and you’ve reviewed the results, you’ll usually have the opportunity to negotiate repairs with the seller. This can take a few days to complete. If you suspect that you’ve received an inaccurate home inspection, here are few steps you can take.
Appraisal (Approx.1-2 Weeks)
Appraisal timelines tend to vary based on the location and the property type and the time of year. For example, an appraisal of a single-family owner-occupied dwelling in a metropolitan area will typically be a faster process than an appraisal of a three-unit rental home or a home located in a rural location. The reason for the differences in timelines is the varying complexity for different types of appraisal reports.
Appraisals for rental homes and homes with more than one unit require additional time. The appraiser must analyze rental trends in the market area in addition to the standard aspects of an appraisal report. Rural areas tend to be more difficult to appraise because the homes are usually spaced further apart. In addition to that, people in rural areas tend to move less frequently than those in suburban and urban areas.
Combining those factors tends to result in less available comparable sales for the appraiser to use in determining the value of the home. During busier times of the year for real estate, it’s common for appraisals to take a few extra days, simply due to an increase in the appraiser’s workload.
Final Approval & Closing Disclosure Issued (Approx. 5 Days, Including a 3-Day Mandatory Cooling Off Period)
Your appraisal and any loan conditions will go back through underwriting for a review and final sign off. Once you have your final approval from underwriting, you’ll receive your Closing Disclosure (CD). The CD is a recap of your final loan terms, closing costs, and prepaids. Upon receipt of the Closing Disclosure, you’ll have a mandatory 3-day cooling-off period. This cooling-off period is your chance to review everything before you sign your final closing paperwork. Sundays and Federal Holidays do not count toward the three days, so it could be more than three calendar days.
Closing/Recording (Typically 2 Days)
After your 3-day cooling-off period, you’ll have an appointment to sign your final loan documents. In most cases, you do not sign and fund on the same day. Typically, you’ll sign one day, and then the loan funds within the next few days after that. Once the loan funds, the documents get recorded at the county recorder’s office, and the home is officially yours.
Approximate Overall Loan Timeline: 30 Days
In general, it should take about 30-45 days from the accepted offer through the date your loan closes. As a reminder, this is just a general timeline; the process can be faster or slower. There may be circumstances which change your timeline.
Make sure you discuss any concerns you have with your Mortgage Advisor throughout the process. We realize you have to schedule movers, pack your possessions, and juggle other tasks to make your move smooth. For those reasons, we’ll do everything we can to make sure your loan closes on time.
Do you have questions about how your mortgage timeline might look?
Connect with a licensed Mortgage Advisor today!