How Long Does It Take to Close on a House With a Conventional Loan?
- The Timeline for a Conventional Loan
- Factors That Can Affect the Timeline
- How to Make the Process Go More Quickly
If you’re planning to buy a house with a conventional loan , you might be wondering about the timeline for closing on the deal. Here’s what you need to know.
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The conventional loan process typically takes between 20 and 30 days. This is much shorter than the timeline for an FHA loan, which can take up to 60 days. The main factor that determines how long it will take to close on your home is the type of loan you choose.
The Timeline for a Conventional Loan
The timeline for a conventional loan is different for every home buyer. The process can take anywhere from a few weeks to a few months. There are a few factors that will affect the timeline, such as the type of loan you choose and the lender you work with. Keep reading to learn more about the timeline for a conventional loan.
Applying for a Loan
The first step in applying for a conventional loan is to contact a lender and begin the application process. The lender will collect information about your employment, income, debts, and assets, as well as run a credit check. Once they have all of this information, they will give you a pre-approval letter which indicates how much they are willing to lend you.
The next step is to find a real estate agent and start looking for a home within your price range. Once you have found a home that you want to make an offer on, your agent will help you write up the offer and submit it to the seller. If the seller accepts your offer, then it’s time to move on to the next steps in the process.
##Heading: Home Inspection
The home inspection is an important step in the conventional loan process because it gives you the chance to make sure that the home you are buying is in good condition and that there are no major problems that could end up costing you a lot of money down the road. A professional inspector will go through the home from top to bottom and look for any issues that need to be addressed. If they find any major problems, you may be able to negotiate with the seller to have them fix them before you close on the loan.
An appraisal is required in order to get a conventional loan because lenders need to know that the home is worth at least as much as they are lending you. An appraiser will come out and look at the home and compare it to similar homes in the area that have sold recently in order to come up with an estimate of its value. If the appraised value comes in below the amount of the loan, then you may need to negotiate with the seller on price or look for another home.
Once all of these steps have been completed, it’s time for underwriting. This is when a team of analysts at the lender reviews your file and makes sure that everything meets their guidelines for approval. If everything looks good, then they will give you a “clear to close” and you can move on to scheduling your closing date.
The Loan Underwriting Process
Once you have a fully executed purchase contract, your loan officer will begin the process of collecting all of the documentation needed to submit your loan file to underwriting.
The underwriter’s job is to assess risk and ensure that the borrower meets all of the requirements needed for approval. This can take anywhere from a few days to a week or more, and the timeline can be impacted by factors such as the completeness of your loan file, the current volume of loans being processed, and whether any issues arise during the underwriting process.
Once your loan is approved, you will be issued a commitment letter outlining any conditions that need to be met in order for the loan to be funded. These conditions are typically related to items such as verification of employment, final approval of The home appraisal and a review of your homeowners insurance policy.
Once all conditions have been satisfied, the loan will be funded and you will be on your way to closing on your new home!
The Closing Process
After your loan is approved, you will work with your real estate agent to schedule a closing date. The typical closing takes place 30-45 days after the offer is accepted, but this timeline can vary based on the type of loan you are using and the state in which the property is located.
Once the closing date is set, your loan officer will work with you to collect the necessary documents and send them to the loan processor. The loan processor will review all of the information to make sure that everything is in order and then send it on to an underwriter.
The underwriter is responsible for reviewing the loan application and determining whether or not the borrower presents a acceptable level of risk. Once the underwriter has made a decision, they will issue a final approval and send the file back to the loan processor.
The loan processor will then coordinate with the title company to schedule a date and time for signing. All parties involved in the transaction (buyers, sellers, agents, lenders, etc.) will meet at the title company to sign all of the necessary paperwork and finalize the deal.
Once everything has been signed and all funds have been transferred, you will be given the keys to your new home!
Factors That Can Affect the Timeline
There are a lot of variables that can affect how long it takes to close on a house with a conventional loan. Some of these variables include the type of loan you’re getting, the type of house you’re buying, and the lender you’re using. In this article, we’ll go over some of the most common factors that can affect the timeline of your loan.
The Type of Loan You Choose
The type of loan you choose can affect how long it takes to close on your home. A conventional loan is a type of mortgage that is not backed by the government. conventional loans typically take longer to close than other types of loans, such as FHA loans or VA loans.
The Lender You Work With
How long it takes to close on a house with a conventional loan depends on the lender you work with. Some lenders are able to close faster than others.
For example, Navy Federal Credit Union has a goal of closing all conventional loans within 30 days. However, the average time it actually takes to close on a house with a conventional loan from Navy Federal Credit Union is 43 days.
Other lenders, such as Quicken Loans, have a similar goal of 30 days but their average closing time is much shorter at just under 20 days.
So, while the type of loan you get does have an impact on how long it takes to close, the lender you choose is just as important.
The Property You’re Buying
The type of property you’re buying can also have an effect on the timeline. If you’re buying a brand-new home that’s part of a larger development, the process might move along more quickly since the builders are usually motivated to get people moved in and settled. On the other hand, if you’re buying an older home that needs some work, it might take a bit longer to complete all of the necessary repairs and renovations.
How to Make the Process Go More Quickly
conventional loans follow strict guidelines that are set by Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that provide stability in the housing market. These guidelines include a minimum credit score, down payment requirements, and maximum debt-to-income ratios.
Work With an Experienced Loan Officer
The first step is to work with an experienced loan officer who can help you understand the process and guide you through it quickly and efficiently. A good loan officer will be able to answer all of your questions, help you fill out the necessary paperwork, and submit your loan application to the underwriter.
The underwriter is the person who will ultimately approve or deny your loan. They will review your financial history, employment history, and current assets and liabilities. Once they have all of the necessary information, they will make a decision on whether or not to approve your loan.
If you are approved, the next step is to sign the loan documents and close on the property. This can usually be done within a few weeks. Once everything is signed and finalized, you will be the proud owner of your new home!
Get Pre-Approved for Your Loan
The first step in the home-buying process is to get pre-approved for a loan. Pre-approval is different than getting pre-qualified for a loan, which is basically a quick run-through of your finances to determine what size mortgage you can afford. A pre-approval means a lender has looked at your financial information in detail and has given you a letter stating how much of a loan you qualify for and what the interest rate will be.
Have Your Documentation in Order
Having all of your documentation in order before you begin the home-buying process can help make it go more quickly. Your loan officer will need to see proof of employment, income, assets, and debts, as well as a credit report. You can speed up the process by gathering these items in advance and having them ready to provide to your loan officer.
To close on a house with a conventional loan, it usually takes between 2-4 weeks. This timeframe can be shortened or lengthened depending on the circumstances (e.g. if you’re working with a professional real estate agent, if you’re buying a home in a hot market, etc.). The most important thing is to be prepared and to work with a knowledgeable and experienced loan officer.