The Complete Mortgage Loan Process Timeline Explained

Buying a home is an exciting milestone in life! But for first-time homebuyers, the mortgage process can seem complicated and intimidating. This step-by-step guide breaks down the typical mortgage timeline into easy-to-understand steps so you know what to expect.

Preapproval Stage

The first step toward homeownership is getting preapproved for a mortgage loan Preapproval typically takes anywhere from a few days to a couple weeks Here’s what happens during the preapproval process

• Meet with a lender The first step is to meet with a mortgage lender, either in person or virtually. The lender will ask about your income, assets, debts, and credit history to determine the loan amount you qualify for

• Provide documentation. You’ll need to provide documents to verify your financial information, like W-2s, pay stubs, bank statements, and tax returns.

• Get your credit pulled. The lender will perform a hard credit check, which allows them to view your full credit report. This won’t hurt your credit score.

• Receive a preapproval letter. Once approved, you’ll receive a preapproval letter stating the maximum loan amount you’re eligible to borrow. This shows sellers you’re a serious buyer.

Preapproval typically takes anywhere from a few days to two weeks. Having your financial documents organized makes the process faster.

House Hunting

With preapproval letter in hand, you can confidently start house hunting within your approved price range. On average, buyers search for 10 weeks and view 10 homes before making an offer. But in competitive markets, you may need to act swiftly when you find the right home.

• Connect with a real estate agent. An experienced real estate agent will help you identify homes in your budget and schedule showings.

• View homes. Attend open houses and schedule private showings of homes you’re interested in. Ask your agent detailed questions.

• Make an offer. Once you find the perfect home, your agent will help you submit a competitive offer. This should include earnest money and any contingencies.

House hunting can take anywhere from a few weeks to a few months depending on your market. Moving quickly is key to success in competitive markets.

Mortgage Application

Once your offer is accepted, it’s time to complete a full mortgage application with your chosen lender. You can stick with your preapproval lender or shop around.

• Choose a lender. Compare mortgage rates and fees from multiple lenders. Assess which one best fits your needs.

• Submit application. Work with your loan officer to submit a completed application along with any additional needed documents.

• Get disclosures. Within three days, you’ll receive a Loan Estimate outlining the loan details like rate, fees, and monthly payments.

The mortgage application process typically takes anywhere from 2-4 weeks. Respond quickly to any additional requests from your loan officer during this time.

Home Appraisal

The lender will order an independent appraisal to verify the home is worth the purchase price. Appraisals typically take 1-2 weeks to complete.

• Schedule the appraisal. The lender will schedule a certified appraiser to inspect the home. You don’t need to be present.

• Receive appraisal report. The appraiser will complete a detailed report assessing the home’s value. You’ll receive a copy from the lender.

• Appraisal review. The lender verifies the appraisal supports the purchase price. If not, you may renegotiate or cancel the deal.

Don’t make any costly repairs or renovations between contract and closing, as the appraiser will evaluate the home as-is.

Underwriting

During underwriting, the lender verifies all your financial information and approves the loan. This typically takes anywhere from 2-4 weeks.

• Processor prepares file. They’ll collect and verify documents, order credit reports, title search, etc.

• Underwriter reviews file. They analyze your credit, income, assets, and debts to assess loan eligibility and risk according to the lender’s guidelines.

• Get loan conditions. The underwriter may request additional documents from you to clarify or confirm information.

• Obtain mortgage approval. Once all conditions have been cleared, you’ll receive final loan approval.

Underwriting goes smoother when you respond promptly to any requests. Make sure all income and asset documents are consistent.

Closing Timeline

Once underwriting is complete, you’re ready for the closing process leading up to the big day! This typically takes 3-4 weeks.

• Closing docs ordered. The lender will order all closing documents for the transaction about 10-14 days before closing.

• Review docs. You’ll have a chance to thoroughly review the closing documents and ask questions prior to signing.

• Final walkthrough. Re-inspect the home 1-2 days before closing to confirm no changes were made and it’s ready for move-in.

• Closing day. Review and sign your documents, finalize funds, and receive the keys! The home is now officially yours.

Closing goes more smoothly when you communicate with your lender about any questions on the documents and costs. Always perform a final walkthrough.

Bottom Line

While the mortgage process has many steps, you don’t have to navigate it alone. Rely on trusted professionals like loan officers and real estate agents to guide you every step of the way. And don’t hesitate to ask lots of questions so you can make informed decisions.

Buying a home is a big undertaking, but having a clear picture of what to expect in the mortgage timeline arms you with the confidence and knowledge to smoothly handle each stage. Before you know it, you’ll have the keys in your hand to your brand new home!