It can take anywhere from 30 to 45 days to close on a home after making an offer and completing a mortgage application.
However, some mortgage lenders promise speedy closing timelines, as fast as seven to 10 days in some cases. The fastest closing timelines are typically when the buyer pays cash and can skip the appraisal process.
After receiving a mortgage commitment letter, the next steps usually involve coordinating with your real estate agent and seller to set a closing date, meeting any outlined conditions in the letter and preparing necessary documentation for the closing.
Your lender is required to send you a Closing Disclosure that you must receive at least three business days before your closing. It's important that you carefully review the Closing Disclosure to make sure that the terms of your loan are what you are expecting.
You can back out of buying a house any time before closing. However, you'll likely face penalties — including possibly being sued — if the purchase agreement has already been signed and you're backing out for a reason that isn't listed as a contingency in the purchase agreement.
There are certain government-mandated waiting periods to create transparency and prevent fraud. The underwriter can also take longer if they need to confirm your paperwork and buying contingencies on your loan. The closing process can wrap up in 30 days or take longer than 60 days.
The mortgage commitment letter proves you're preapproved, signaling to homesellers you're a serious buyer with backing. Commitment letters may be conditional, meaning you must meet basic requirements, or final, meaning the terms can't be changed.
The closing date is set after your mortgage loan has been approved and you accept the commitment letter. Your agent will coordinate this date with you, the seller, your lender, and the closing agent.
The Meaning of “Clear to Close”
When your lender informs you that your mortgage is “clear to close,” it means that all the prerequisites for your loan have been met, and the mortgage underwriter has given the final approval. This includes: Verification of your income and assets.
VA loans tend to take longer to close than conventional loans. This is due to the stricter underwriting requirements for VA loans and the fact that not all lenders underwrite VA loans in-house.
Each situation is different, but underwriting can take anywhere from a few days to several weeks. Missing signatures or documents, and issues with the appraisal or title insurance are some of the things that can hold up the process.
There's still a slim chance you won't get a mortgage, and you won't get the house even after a commitment letter.
Once all liens are satisfied, the buyer receives the deed along with a title insurance policy. This usually takes two weeks, but can vary greatly based on the unique circumstances of each transaction.
The closing on a mortgage loan commitment at closing typically involves the buyer and the lender. During the closing process, the buyer and the lender finalize the terms of the mortgage loan, and the buyer signs the necessary loan documents.
We recommend that you make the check payable to yourself and bring it to closing. The title agent will place an endorsement on the check and you will sign the check over to title. If you needed to keep the money, you could return to the bank and redeposit the check made payable to yourself.
Some buyers may be able to negotiate an immediate possession date. This means as soon as the transaction is closed and the deed is recorded, the buyer can move in. A few other common buyer possession dates may be 15 days, 30 days, 60 days, or even 90 days after closing, depending on how much time the seller needs.
After the preliminary title report/title commitment is issued, the curative work begins. Curative work is any action that's necessary in order to eliminate items identified as “road blocks” which otherwise could prevent transfer of title.
The final approval usually occurs after all the conditions outlined in the commitment letter have been satisfied. At that point, the lender thoroughly reviews the documentation and confirms that all requirements have been met.
How long does it take to get a mortgage commitment letter? It can take 20 – 45 days to receive a mortgage commitment letter from the time the paperwork is submitted.
A letter of commitment is a formal binding agreement between a lender and a borrower. It outlines the terms and conditions of the loan and the nature of the prospective loan. It serves as the agreement that initiates an official loan borrowing process.
1 week out: Gather and prepare all the documentation, paperwork, and funds you'll need for your loan closing. You'll need to bring the funds to cover your down payment, closing costs and escrow items, typically in the form of a certified/cashier's check or a wire transfer.
Lenders typically consider various factors before approving a loan application. By focusing on building a good credit score, reducing debt, improving your debt-to-income ratio, and providing accurate documentation, you can enhance your eligibility for loan approval.
Most buyers won't have to wait very long to meet at the closing table once they're clear to close. You should expect the process to follow the clear-to-close 3-day rule, where you receive your Closing Disclosure 3 business days before your closing date.