How fast for a mortgage loan closing
A normal mortgage loan closing normally takes 30 days. However, we can probably expedite a mortgage loan closing in a case of an emergency where the home buyer can cooperate with the mortgage lender in getting all required documents together and submitting it with the signed mortgage application.
The first step towards a mortgage loan closing is the mortgage application. Your mortgage broker will prepare the 1003 mortgage application for you to sign along with the proper disclosures and a list of required documents that will be needed. Required documents include two months bank statements, two years tax returns, 30 days pay check stubs, two years W-2’s, 12 months cancelled checks for rent verification, asset information such as 401k or IRA statements, and other documents that apply to the mortgage loan borrower such as bankruptcy papers, child support payments, divorce decree, etc. This process normally takes no more than two days.
Processing mortgage application
Once you submitted your signed application and all the required requested documents, it gets processed. The mortgage processor makes sure that all of the information in the mortgage application is correct and all the necessary documents are in order to avoid potential conditions by the underwriter. Processing takes one to two business days. The loan is then submitted to underwriting.
Once the mortgage loan processor has processed the mortgage loan application, he or she then submits it to the underwriting department and the mortgage application is assigned to an underwriter. The underwriter goes through your application and verifies all the information on the application and cross checks it with the documents. They verify your tax returns with the IRS, make sure there are no overdrafts on your bank accounts, and makes sure that you are able to afford the monthly mortgage payments. They also review your credit report and will note any discrepancies and vague items that need clarifying. This normally takes two days.
Once the underwriter reviews your file and is comfortable with your ability to pay, you will get a conditional approval. The appraisal is then ordered and the underwriter will issue additional conditions, if any, for clarification such as updated bank statements, updated pay check stubs, verification of employment, or other minor conditions.
The appraisal normally takes a week. Once the appraisal is turned in, the underwriter reviews the appraisal and will grant a clear to close.
To be on the safe side, a 30 day window is what it takes for a mortgage loan closing. However, the fastest a mortgage loan closing can occur is three weeks as long as everyone is on the same page.