How long does it take to process and close a mortgage?

By Michael Jensen, Mortgage and Finance Guru

Edited by Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Updated September 22, 2021

It typically takes one-to-two months to close a mortgage depending on many factors including your lender, loan program, mortgage type, loan amount, property type, market conditions and other considerations.

Your lender dictates the mortgage process and different lenders take different lengths of time to close loans. Some lenders have more staff available to process loans which enables them to close mortgages faster. Additionally, some lenders utilize more technology which allows them to process mortgages more efficiently.

The lender’s underwriting process also influences timing. Mortgages that can be reviewed using automated underwriting require less time while mortgages that require manually underwriting, for example if you are requesting an exception to an application guideline, take longer to process.

Review our Mortgage Process Timeline to understand the steps involved to process and close a mortgage

Your loan program is another factor that affects how long it takes to close your mortgage. Conventional programs are usually faster and easier to process as compared to government-backed mortgage programs such as FHA, VA and USDA loans. Some low down payment programs may also take longer because they require applicants to submit additional paperwork. Additionally, niche programs such as bank statement loans or non-owner occupied mortgages may require extra time and documentation to close.

Your mortgage type - purchase or refinance -- may also have an impact on your timing. Although refinances usually require less time and effort to process (because you have been through the mortgage process as least once before), many lenders prioritize home purchase loans because you may need to meet a closing schedule.

For example, you may have a 30 or 45 day escrow period in which to complete the property purchase and your lender wants to make sure that your mortgage closes in time. This is an important point to highlight if you are buying a home -- before you select a lender make sure that they can process and close your mortgage within your closing time frame.

Additionally, for both purchase loans and refinances you may want to consider locking your mortgage for the length of time required to close your loan.  That way your mortgage terms stay the same even if interest rates increase from the time you submit your loan application until closing. 

We recommend that you contact multiple lenders in the table below to understand your mortgage terms depending on the length of your lock period.  Shopping lenders on FREEandCLEAR is free and does not affect your credit.

Specific types of applicants may also require more time. For example, qualification requirements for self-employed applicants are more demanding than for borrowers who are salaried or hourly employees who receive a W-2. Additionally, if you have credit issues or a non-traditional credit profile, the lender’s underwriter may take more time to review your loan application.

The type of property being financed can also affect the timing for mortgage. Single family homes usually require less time while condominiums, co-ops and multifamily properties usually require additional documentation and time to process.

Our Day-by-Day Mortgage Schedule provides a detailed timeline from when your offer is accepted through closing

Your loan amount can also influence mortgage timing as larger, jumbo loans may take longer to process, especially if you are required to meet additional qualification requirements.

Finally, market conditions are a major influence on how long it takes to close a mortgage. In busy markets when a lot of people are applying for mortgages, it may take longer to perform an appraisal report or title search. The lender’s underwriting department may also get backed up which can slow down the mortgage process. If the mortgage market is relatively slow, the lender and third party service providers such as appraisers and title companies should have more bandwidth to process your loan.

Getting pre-approved lets you know the loan amount you can afford and can speed up the mortgage process.  Use our free, no obligation form to get pre-approved.

To make the mortgage process go as fast as possible, we recommend that you organize all of your paperwork before you submit your loan application. Having your pay stubs, tax returns, W-2s, bank and brokerage account statements and loan statements ready to go can give you a head start. If you are refinancing an existing mortgage it is helpful to have your current mortgage documents, homeowners insurance declaration and property tax statement available.

In sum, there is no definitive timetable to process your mortgage. We recommend that applicants add at least a week to how long the lender says it will take to close your loan. When it comes to getting a mortgage you should expect the unexpected as delays frequently arise. Building an extra cushion into your timetable can help you better manage these surprises and successfully close your mortgage on time.

Sources

"Understanding the Timeline." My Home by Freddie Mac. Freddie Mac, 2019. Web.