How Long Does It Take To Close On A House? What To Expect

Have you ever wondered how long it takes to close on a house? Buying a house can be a long process, but the answer depends on your situation and the home loan type.

From house hunting to getting a mortgage and having an offer accepted, it can take several months until you get the keys to your new home. Once closing day is in sight, you may feel like you’re in the home stretch.

The closing itself, though, can also be a tense process. Something could go wrong and delay you holding those keys in your hand.

In this article, we’ll take you through the closing process, what to expect on closing day and what you can do to keep things on track.

How Long Does Closing On A House Take?

The closing date is when the house closing process wraps and you become the owner of your new home. The typical timeline to close on a house is between 30 – 45 days, but the timing varies for every transaction.

The closing process typically has two parts:

●      Finalizing details on your loan

●      Finalizing details on your home

When you close on your loan, it becomes final, and the money is disbursed. When you close on your home, you become its legal owner. These two events usually happen at the same time. So, on your closing date, your mortgage loan becomes final, and you get the keys to your new home.

Although some delays are unavoidable, you can do your part to ensure a seamless closing by getting a preapproval, having your documents readily available and making your down payment on time.

How Long It Takes To Close On A House By Mortgage Type

How long it takes to close on a house can also vary depending on the borrower's type of mortgage. Below are some average numbers based on historical data.

Average Closing Time On A House By Step

Here’s a closer look at the home buying process and how each stage factors into the closing timeline:

1. Application And Preapproval (1 Day)

Filling out the application and getting mortgage preapproval takes 1 day, but this depends on the lender. Getting a preapproval shows the seller that you’re a serious buyer and exactly how much a lender is willing to let you borrow. Fill out all necessary information as accurately and quickly as possible. Any errors or inconsistencies can cause delays in the closing process.

2. Disclosure (Under 7 Days)

The disclosure process is completed by the mortgage lender and typically takes under a week to complete. The lender puts together a five-page document known as the Closing Disclosure, which outlines the final terms of the loan, estimated monthly payments, fees and closing costs. Federal law requires that all buyers receive their Closing Disclosure at least 3 business days before the closing date.

3. Additional Documentation (Under 7 Days)

Your lender will need income and asset documentation to verify that you can afford to make monthly mortgage payments on the loan. These documents can include W-2s and other tax documents, pay stubs, bank statements, investment account statements, asset statements and more.

If you’re organized, the documentation process should only take a few days. But if your assets are complicated, it’s best to ask your lender what paperwork they’ll likely need. This can help speed up the process.

4. Appraisal (7 – 14 Days)

A home appraisal is often confused with a home inspection. Your lender will require an appraisal to determine the fair market value of the home, whereas a home inspection is an examination of the condition and safety of the property. Home inspections are usually optional, while appraisals are required for mortgage approval.

The lender will hire a licensed appraiser to determine the home’s value based on recent sales of comparable homes and their professional and unbiased judgment of the property. If the appraised value is much lower than what the buyer and seller agreed upon for the home, it could affect the size of the loan.

The appraisal process takes between 1 and 2 weeks, depending on how soon the lender schedules the appraisal and how quickly the appraiser turns in their analysis.

5. Underwriting (1 – 3 Days)

During the underwriting process, an underwriter will evaluate all financial information to ensure you meet all home loan requirements. This step typically takes 1 – 3 days, and the underwriter must review all documentation related to your income, appraisal, assets, debt and credit history.

6. Conditional Approval (7 – 14 Days)

When the underwriter goes through your financial documents, they can sometimes run into a problem. They can either deny your loan if something’s wrong, or they can give a conditional approval if you provide the additional information they require.

Conditional approval can take 1 – 2 weeks, but you can expedite the process by speaking with your lender and sending your documents as quickly as possible.

7. Cleared To Close (3 Days)

Once the underwriter approves you for the loan, you’ll receive a final clearance to close and the final Closing Disclosure. You must wait for a mandatory 3 days before signing the final paperwork, but you can take this time to review your loan terms and prepare for the scheduled closing date.

8. Closing And Funding (1 Day)

The final step in the home buying process is closing day. While the entire process can last a few weeks, it only takes about 1 – 2 hours to sign your closing papers on your closing date. On closing day, you’ll:

• Receive your closing documents: There’s a lot of paperwork, so come prepared to keep it organized.
• Transfer money: You’ll need to pay your down payment as well as any closing costs. Your lender will pay the mortgage loan (the amount you’re borrowing), and the seller will receive their money. A closing agent will make sure that money is sent where it needs to go.
• Show proof of insurance: Before the lender agrees to fund the loan, they’ll want to see proof of homeowners insurance.
• Have an escrow account set up: You’ll also make your initial deposit into the account.
• Get ownership of the home: Once the money has been transferred and forms have been signed, you become the legal owner of the home.
• So how long does closing take when you reach closing day? That can depend on how long the paperwork takes to get signed.

 Common Closing Delays

Even at the very end of the process, a closing can still go awry. Some closing delays are unavoidable – like an outstanding lien on the title or a low appraisal – but there are some things buyers can do to make sure they aren’t unnecessarily holding up the closing process.

Here are some common reasons for delays during the closing process:

• Contingencies: Contingencies are conditions that must be met before closing can occur. If a contingency outlined in the purchase agreement was not satisfied, then this can delay closing.
• Finances: There are several things that can affect buyer financing and delay the closing process. Funding can be denied because of a big purchase, job loss or change, a reduction in your credit score, a lower appraised value on the home and more.
• Appraisal: A low home appraisal can delay closing or lead to mortgage denial. If the appraiser’s assessment is lower than the agreed-upon amount, the lender may not finance the full loan.
• Response time: How quickly you respond to your lender and real estate agent can impact the closing process. You don’t want a missed email or forgotten deadline on someone else’s behalf to hold up your closing.

How Fast Can You Close On A House?

You can close on your new home in as little as 30 days, and in some cases, even less, particularly if you’re paying with all cash. To ensure a smooth process and quick closing, you need to be prepared.

Whether you’re doing a traditional closing or an eClosing, here are some tips for speeding up the closing process:

• Know when and where your closing is set to take place. You’ll also want to note who is in charge of your closing: a title agent, closing attorney, escrow agent or someone else.
• Make a list of what you need to bring to your closing. This may include ID, proof of a wire transfer or a cashier’s check for the money needed to close, your Closing Disclosure and other important documents. The person in charge of your closing can provide you with a full list.
• Confirm the final amount you’ll need to pay at closing. You’ll find this detail on your Closing Disclosure.
• Review documents and compare your Closing Disclosure to your Loan Estimate. Make sure that your loan details are correct and that you understand all the fees.

The Bottom Line

Closing day is a big day – the culmination of your home buying journey. Though you may be anxious to get your keys and open the doors to your new home, don’t let details slip past you as you near the end.

Take your time, go through each document in detail and don’t hesitate to talk to your real estate agent if you have questions or concerns. Checking all your documents thoroughly can help you avoid potentially costly mistakes. It’s worth the wait, effort and patience to have everything in order.

Ready to start your journey to homeownership? Get started on an application today!