It is technically possible to close on a home in 30 days, or even less, particularly if you are paying all-cash rather than getting a mortgage or dealing with a homebuying company or iBuyer. But in general, according to data from ICE Mortgage Technology it takes about 44 days to close on a home.
For home purchases financed with mortgages, the average time to close is 50 to 51 days, according to ICE Mortgage Technologies, a mortgage advisory and technology platform. It is possible for closings to be as quick as 30 days, though, especially in all-cash deals.
With careful organization and clear communication between the buyer, seller and lender, you can speed up the closing process, potentially saving you and the seller money and saving everyone unnecessary anxiety.
Average Closing Time for a Conventional Loan
It takes approximately 47 days to close on a conventional mortgage loan in accordance with Fannie Mae's qualified lending standards. Conventional refinances are faster and take around 35 days to close on average.
People tend to think FHA loan requirements include heaps of additional paperwork, red tape, and a lengthy process. But one of the best little known benefits of FHA loans is a quick approval and ability to complete closing within 30 days.
It is technically possible to close on a home in 30 days, or even less, particularly if you are paying all-cash rather than getting a mortgage or dealing with a homebuying company or iBuyer. But in general, according to data from ICE Mortgage Technology it takes about 44 days to close on a home.
Closing Time Lines by Mortgage Type
Federal Housing Administration (FHA) loans take a bit longer to close due to additional documentation requirements. They take an average of 62 days to close.
Timing Requirements – The “3/7/3 Rule”
The initial Truth in Lending Statement must be delivered to the consumer within 3 business days of the receipt of the loan application by the lender. The TILA statement is presumed to be delivered to the consumer 3 business days after it is mailed.
While any day is a good day to close on a desired property, real estate agents and attorneys typically prefer closes between Tuesday and Thursday for a practical reason. Closing real estate transactions requires both the buyer and seller—and their representative attorneys—to sign off on hundreds of pages of documents.
Sellers Think FHA Loans Take Longer To Close
On paper, the difference isn't much. According to the previously mentioned Ellie May Origination Insight Report, it took conventional purchase loans an average of 49 days to close in May 2021, compared to 54 days for FHA loans, a difference of only about a work week.
Mortgage underwriting (30–60 days)
The mortgage underwriting process takes the biggest chunk of time when closing on a home. This is where lenders assess the risk of giving you money (in other words, how likely you are to repay the home loan you borrow).
Some may have to relocate quickly for a job or have an urgent need for cash in hand. The enticement of a quick closing is important right now because it helps your offer stand out from the crowd, especially if you're competing with cash buyers.
It's never too early to start packing! The sooner you start, the less stressed you'll feel as it gets closer to your closing date and moving into your new home.
It could be a multitude of reasons why the seller wants to close sooner - they don't want you to back out as has been mentioned and know that prices will drop, they need the money due to being laid off, don't want to be stuck with property tax burden, they don't want to deal with the hassle of trying to rent it out ...
Since mortgages are paid in arrears and on the first of the month, your first mortgage payment typically comes at the start of the new month after you've lived in your new home for 30 days. This means that if you close on your house on May 25, your first payment is due July 1.
If you're unsure of what payments you want to make at closing, or when you would like to make your first mortgage payment, closing in the middle of the month is a great compromise between the two deciding factors. With this option, you will only owe half a month's worth of prepaid interest at closing.
Conventional wisdom, according to Buch and Rhoda (1999), suggests using the “2-2-2 rule” as a criterion for refinancing: “Refinancing may make sense if the interest rate potentially available to you is 2 percent less than you are now paying, if you plan to stay in your home for more than two years, and if the ...
28% / 36% rule
With this rule, housing costs should not make up more than 28% of your gross income, and no more than 36% of your gross income should be required to meet all your monthly debt obligations combined.
Under the TRID rule, credit unions generally must provide the Loan Estimate to consumers no later than seven business days before consummation.
How long does it take to get final approval after conditional approval? The good news is that once your loan has been conditionally approved, you're basically in the home stretch. That being said, your lender will likely need another 1–2 weeks to finalize your home loan and move forward with your closing date.
Passing an FHA home inspection is harder than passing other types of home inspections because if the inspector identifies serious problems with the property, those problems will have to be dealt with before you can secure a loan.
It typically takes anywhere from four weeks at the low end to six months (or more) to shop for and close on a house. But it can be quicker if you make a strong offer right away in a fast-moving market or slower if you have a hard time finding just the right place or keep getting outbid.