Reader Question: “What is the general mortgage timeline that takes place when buying a home? I’m just wondering how long it takes to get from the application process to the actual signing and closing stage. We are trying to schedule movers and finalize some other details. But the timing is something of a gray area for me. Any suggestions?”
The mortgage timeline will vary based on the type of loan you’re using, and the type of real estate transaction you’re involved in. So there’s not one particular “size” that fits all. But there are certain milestones that take place along the way, and most of them do have a time frame associated with them.
So let’s walk through a typical home-buying process, with a focus on timing.
Example Timeline for the Mortgage Process
Let’s say I’m planning to buy my first home, and I’m going to use a conventional home loan (i.e., not an FHA or VA loan). My mortgage timeline might look something like this:
- First, I schedule an appointment with a lender to get pre-approved for a loan. This is when the lender reviews my credit, income and debt, in order to determine the maximum amount they’re willing to lend. I schedule my appointment for June 1st.
- Once I’ve been pre-approved for a certain amount, I hire a real estate agent and begin the house-hunting process. I have a pretty good idea where I want to buy, and the kind of house I need. So it goes quickly. After a few weeks of searching, I find a suitable property and make an offer on July 1st.
- The sellers accept my offer the same day, and we agree on a 60-day escrow period. So I go back to my lender to formally apply for the mortgage loan. I give them a copy of my purchase agreement and submit a loan application on July 7th.
- In accordance with the Real Estate Settlement Procedures Act (RESPA), the lender must give me a Good Faith Estimate within three business days of my application. This document estimates the full cost of my mortgage loan, including all of my closing costs. I receive my GFE on July 10th.
- The lender will also give me a certain period of time to lock in the interest rate they’ve offered. I must lock in the rate before this cutoff, or it could be subject to change. I’m happy with the rate they’ve offered me, and I don’t want the rate to rise while they are processing my application, so I lock it down on July 15th.
- At this point, two things are happening. First, I’ve scheduled my home inspection to make sure there’s nothing seriously wrong with the house. Meanwhile, my lender is processing my loan application (the underwriting process). During this part of the mortgage timeline, there’s not much else for me to do. I simply have to wait for my final approval on the loan. The approval comes a couple of weeks later, on August 1st.
- I’ve completed the home inspection. I’ve received a final approval from the lender (hooray). And now I’m just waiting for the closing process. My closing / settlement day is scheduled for August 31st.
Keep in mind that a mortgage timeline will vary from one buyer to the next. There are many variables and obstacles that can pop up along the way, so there’s no one size that fits all. With that being said, the sample timeline above will help you know what to expect during your journey. Good luck.