It’s an exciting time when you find a house you want to buy and make a deal with the seller. Once that happens, you may be anxious to start moving in so you can turn your dream house into a home. So, how long does it take to close on a house?
Cash Versus a Mortgage
If you’re able to pay cash for a house, your closing could happen in a week or two. Most people need to borrow at least part of the money needed to pay for a house. If you need a mortgage, it could take between 30 and 60 days to get through the actual closing process. The type of mortgage you’re applying for can affect how long it takes since government-backed mortgages take longer to close than conventional mortgages. Once everything is ready to go, the actual closing only takes an hour or two.
What Happens During the Closing Process?
Once the seller has agreed to accept your offer, the closing process begins, and some of what happens include:
- A home inspection is done, which includes requests for repairs.
- You apply for a mortgage and provide documents requested by the lender, such as pay stubs and bank statements.
- Underwriters review your documentation.
- An appraisal of the home is done, which lets the lender know its value. You’ll receive a copy of the appraisal and a closing disclosure that clearly states closing costs.
- A title search is conducted to make sure there are not any undisclosed liens on the property.
- You secure homeowner’s insurance.
Once all the requirements have been satisfied, the lender issues a clear to close notice, and your final documents are prepared to be signed at closing.
Things That Can Delay a Closing
A variety of things can cause delays. If you make large deposits or withdrawals from your bank account, it may be questioned. If underwriters find missing documentation, undisclosed debts, or issues with your credit, it can slow down the process. If the title search reveals other liens on the property or if the appraisal comes back at a lower value than expected, these issues need to be resolved before you can close.
When closing day arrives, you’ll pay your down payment, prorated real estate taxes, and other closing costs. You’ll sign the mortgage, promissory note, and several other documents. You’ll need to bring your ID and proof of insurance. Always make sure to take your time reviewing documents before you sign them to make sure all the information is accurate.
Making Sure You Are Creditworthy
Before you apply for a mortgage, make sure you’ll be considered creditworthy. Save money toward a down payment and build up a history of on-time payments on loans and credit cards. Check your credit report to make sure everything on it is correct. Errors in your credit report can delay your closing or affect the terms of your mortgage. Dovly is an automated credit repair engine that can help you dispute errors on your credit report. Try it risk-free with our free membership tier. Contact Dovly today.