Good timing can make a big difference in life. This is certainly true of buying a home and getting a mortgage loan. While many matters in this process are out of our control, carefully determining when to shop for a mortgage, apply for financing, and close on a loan may reap benefits.
Learn what the experts have to say about the ideal timing when you decide to buy a house and apply for a mortgage.
Getting pre-approved for a mortgage is one of the first steps to take when buying a home But when exactly should you start the application process? Timing your mortgage application strategically can help ensure a smoother process This article covers the ideal times to apply based on month, date, interest rates, and your personal home buying timeline.
Why Timing Matters for Mortgage Applications
Mortgage lenders and loan officers have busy seasons that impact how quickly they can process your application and get you to closing. Being strategic about your timing helps avoid delays Here are some key reasons timing is important
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Loan officers are busiest at month-end trying to meet quotas. Applying earlier in the month avoids these crunch times.
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Interest rates fluctuate daily, so applying when they are lower saves you money.
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Processing times vary by lender workload. Applying during slower periods can speed up approvals.
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Lining up your pre-approval and home search timeline allows for a seamless buying process.
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You need time for the full approval process to complete before your target closing date.
While you can apply for a mortgage at any time, being thoughtful about timing gives you the best chance for a fast, smooth experience.
The Best Times of the Month to Apply
The time of month you apply for a mortgage can impact how quickly your application gets processed:
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The first week of the month is ideal, as loan officers are less busy early on. As the month progresses, they become focused on meeting monthly quotas.
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Avoid mid to late month applications if possible. Loan officers may be overwhelmed with other files as they push to hit goals before month-end.
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Earlier in the month leaves more time to gather documents, clear underwriting, and address any issues that arise.
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Month-end applications may not get completed until the next month when volumes ease up. This causes delays.
While you can apply any time, setting your timeline around when loan officers are less busy sets you up for success.
How Interest Rates Impact Ideal Application Timing
Since mortgage interest rates change daily, applying when they are lower can save you money over the life of your home loan. Here are some tips for getting the best rate:
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Monitor daily rate trends to see if they are rising or falling. Apply on a downward trend.
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Pre-approvals are good for 60-90 days. If rates fall during that period, you can usually lock the lower rate.
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Don’t wait indefinitely for the perfect rate. At a certain point, apply before they move higher.
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Connect with a loan officer for insights on rate movement predictions. They can advise the best timing.
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Have your documents ready to move fast when rates dip, before they rise again.
While rates are impossible to predict, being flexible on your timeline can help you get the most favorable terms.
How Your Home Buying Timeline Should Influence Timing
Your personal home buying timeline should also guide when you apply for mortgage pre-approval:
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Get pre-approved before home shopping so you know your budget and can act fast on a home you love.
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Apply 4-8 weeks before making an offer to allow time for processing and underwriting.
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Shop and apply during slower seasons like winter months when there is less competition from other buyers.
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Have financing lined up by early spring when more inventory hits the market.
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Avoid applying right before the holidays when banks tend to close more often.
Aligning your application with when you want to purchase reduces the chance of timing setbacks derailing your home ownership goals.
When to Apply Based on Mortgage Application Processing Times
Beyond monthly and rate cycles, apply based on how long the approval process takes:
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Pre-approval takes 1-2 weeks if you have your documents ready.
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Allow 2-4 weeks after applying for underwriting and full approval.
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Closing can take 4-6 weeks from full approval.
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Add processing buffers around holidays. Closings slow down mid-November through New Years.
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Don’t apply too early either. Pre-approvals expire after 60-90 days.
Carefully calculating dates based on processing timelines prevents last minute surprises or delays.
How Different Lender Workloads Impact Ideal Timing
All mortgage lenders have busy and slow periods that influence turnaround times:
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Smaller lenders may be able to process faster during all seasons.
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Mortgage brokers can shop your application across multiple lenders for the fastest option.
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Large banks tend to have longer approval times and more variation in workload.
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Online lenders provide faster pre-approvals but may have limited support.
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Credit unions usually have consistent turnaround times if you qualify for membership.
Talk to different lender types to get a sense of their workload capacity and how it aligns with your schedule.
Top Tips for Strategic Mortgage Application Timing
Here are some final tips for making sure your application timing sets you up for mortgage approval success:
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Monitor daily interest rates and apply on a downward trend.
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Align your application with your personal home buying goals.
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Avoid month-end applications when loan officers are busiest.
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Apply early in the month and early in the seasonal home buying cycle.
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Calculate processing timelines and work backwards from your ideal closing date.
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Research different lender workloads to find the fastest option.
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Have all your documentation ready to go to speed up approval.
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Get pre-approved before you begin looking at homes.
With the right planning and preparation, you can time your mortgage application strategically to help the process go as smoothly as possible.
Why timing can be important when financing a home
Mortgage interest rates have increased in the first half of 2022. That makes some prospective home buyers wish they would have pulled the trigger earlier. But the truth is that it’s impossible to predict mortgage rates and where they will land in the future. Trying to perfectly time the rate market can lead to frustration and disappointment.
Still, with proper advanced planning, you may be able to position yourself into a better mortgage loan deal and apply for a mortgage at the best time.
“The timing of your mortgage application will help you manage a couple of competing factors,” explains Martin Orefice, CEO of Rent To Own Labs. “First, especially in the current market, interest rates are going up all the time. With this in mind, applying earlier than anticipated is usually a better idea.”
Additionally, it’s wise to get pre-approved for a mortgage loan well before you start making offers on homes.
“The time of the month when you shop for loans and apply for financing can also have an impact,” he adds.
Also, if you expect mortgage interest rates to rise soon (current trends and the Federal Reserve’s plans to raise interest rates as the year progresses suggest that this is a foregone conclusion), it makes sense to time your home buying and financing plans carefully with the goal of acting sooner versus later. Wait too long and you may end up paying a higher interest rate and a higher home sale price.
The best time to begin shopping for a mortgage loan
Herndon Davis, a mortgage loan officer/broker in Fort Lauderdale, Florida, believes the best time to start shopping for a mortgage loan is four months before you begin home hunting.
“That’s because you must devote one solid month of research and due diligence figuring out which lender to choose – whether it’s a bank, credit union, or mortgage company,” he says.
This four-month timeline enables you ample time to save up for the down payment, closing costs, and cash reserves needed after you move in.
“Some lenders require a strict six months of cash reserves,” Davis notes.
After month #1, you’ll need the remaining three months to demonstrate financial responsibility and prudence.
“To prove your creditworthiness, your lender will want to see pristine bank statements with no outrageous cash deposits or withdrawals that cannot be easily explained away, he adds.
Starting plenty early can also give you time to work on improving your credit, if needed, notes Eric Jeanette, owner of Dream Home Financing in freehold, New Jersey.
“Once you are confident that you can qualify for mortgage financing, you can begin rate shopping,” Jeanette suggests.
What NOT to tell your LENDER when applying for a MORTGAGE LOAN
FAQ
How far in advance should I apply for a mortgage?
How do I know when to apply for a home loan?
How long before closing should I apply for a mortgage?
Do you look for house or get a loan first?
How long does it take to get a mortgage?
Now that you’ve researched lenders, applied for preapproval and found a home that you’d like to buy, it’s time to actually apply for the mortgage. All in all, the entire process from application to closing could take anywhere from two weeks to two months. 1. Fill out a mortgage application
When should I start a mortgage application?
Your lender will guide you through the requirements, timing and expectations. The best time to start your formal mortgage application is after signing a purchase and sale agreement with a seller. You’ll typically work with a lender less formally before shopping for a home, during the loan pre-approval process.
What do mortgage lenders consider when applying for a loan?
One of the first things that mortgage lenders consider when you apply for a loan is your income. There is no set dollar amount that you need to earn each year to be able to buy a home. However, your mortgage lender does need to know that you have a steady cash flow to pay back your loan.
Should you get a mortgage before buying a home?
You probably already know that a mortgage is a type of loan that you use to buy a home. It’s a good idea to learn as much as you can about getting a mortgage before you start shopping for a home. The best way to avoid wasting time is to know the players and the process. That means working with a lender to get the best possible loan.