Reader question: “We just went through the appraisal process on a house we are buying. It has been almost a week, but I have not heard back from my mortgage lender yet. I am worried about the timing, and whether or not we can get approved for financing before the agreed-upon closing date. How long does it usually take to get a home loan approval, after the appraisal has been completed?”
It depends on how your lender is doing things. There is a certain sequence of events that most lenders use most of the time. But there are also plenty of exceptions and unique circumstances that can cause delays and variations to the “normal” way of doing things.
So, how long after appraisal until you get a loan approval from your lender? It could be anywhere from a few days to a few weeks, depending on … wait for it … underwriting! The underwriting process could go smoothly and quickly, or it could drag on with a back-and-forth paper chase for several weeks.
You won’t receive a final approval from the lender — “final” meaning you can proceed to closing — until the lender’s underwriter signs off on everything. Underwriting is the moment of truth, so to speak. But the length of the process can vary based on many factors.
Getting from Appraisal to Approval
Here’s how it usually goes. You make an offer to buy a house. The seller accepts your offer, and a purchase agreement is then signed by both parties. You give your lender a copy of the purchase agreement, which includes the amount you have agreed to pay for the house. The lender assigns a home appraiser to check the current market value based on local sales activity (and other factors). If the appraisal goes through, meaning the appraiser says the house is worth what you are paying, your loan file will move on to the underwriter.
So you don’t actually go straight from appraisal to approval. There’s a middle to the story, as well.
In most cases, the underwriter doesn’t even see the loan file until the home appraisal has been completed, because he or she needs that document to complete the assessment.
So the underwriting process occurs after the appraisal and before the final approval. In most cases, anyway. It paves the way to approval — or it sets the train off the tracks, depending on what is uncovered during the process. How long to get a loan approval after appraisal? That will largely depend on how many issues the underwriter finds (or doesn’t find) during the course of his review process.
The best thing you can do during this process is to stay in touch with your loan officer or LO. This person works for the mortgage company and is in charge of steering your loan through the “pipeline” from application to closing. If there are any problems along the way, he or she will let you know. Your job is to resolve any issues that come up, and to do it as quickly as possible.
This is probably more information than you wanted. But this is actually a hard question to answer. As you can see, there are plenty of variables and potential speed bumps along the way. The length of time between appraisal and final approval could be a week, a month, or even longer. It depends largely on the underwriting. You won’t know how long until you get a “green light” from the underwriter. At that point, you’re almost home free.