You have finally decided to buy a home. Now it's time to get to work. Understanding how long it can take to get into a new home is key to setting expectations so your homebuying journey can be filled with happiness and excitement vs. stress and unknowing. Three components can make your home purchase straightforward and effortless.
- Planning and Preparedness
Now that you're on the path to home buying, understanding how much you can afford is the first step. Talking to a mortgage lender to get prequalified will lay the foundation to start looking for homes. Once you have had the prequalification, the next step is to get pre-approved. This is the most critical component in buying a home. You need to have a pre-approval to make a solid offer that a seller will pay attention to. While you're working through the pre-approval process, you can engage a real estate agent. They can help you narrow down your home criteria, including neighborhood, size of the home, area school, to name a few. Real estate agents can help you understand the pros and cons of specific homes and locations.
Once an offer has been accepted, a buy-sell agreement will be signed by both parties. From this point on, everything follows the agreed-upon terms and conditions. The purchase contract will state each entity's rights and responsibilities to close on the property. The buyer works closely with the real estate and mortgage lender to ensure everything is done on time and correctly.
The Typical Timetable
- A signed contract is received by both the buyer and the seller and submitted to the loan officer. The average time for this is 1-2 days.
- The loan officer prepared TRID (TILA-RESPA Integrated Disclosures). This will let the purchaser know what to expect for costs and expenses of the property. The average time for this is 3- 7 business days.
- The loan officer orders an appraisal. A home needs to appraise for the agreed-upon price for the loan to be finalized. Appraisal times can fluctuate wildly based on location and market needs. Appraisals can take anywhere from 10 days to 30 days on average.
- The buyer orders an inspection. The contract allows a certain number of days for inspections to be carried out and repairs to be agreed upon. If you are approved for a VA or FHA loan, the appraiser can require certain repairs to be done as well as your professional inspector(s). Yo
- The buyer and the seller's realtors will work together to arrange the inspection along with the repairs. In some cases, the seller will credit the purchase price if repairs need to be done but cannot be completed in the allotted time.
- After the appraisal is done, the survey will take place. With enhanced title insurance, surveys may not be necessary, but seek advice before you decide not to go this path.
- During this time, your loan officer delivers all lender instructions to the title company, stating what must be completed for the mortgage money to be paid to the seller.
- When you know, the appraisal and surveys are satisfactory, arrange for homeowner and hazard insurance through your insurance broker. The broker will liaise with the lender and title company.
- The title company will perform appropriate searches to prepare new title insurance policies for you and your lender. This can take anywhere up to 15 days, depending on the property under contract.
- Closing documents will be prepared and issued right before the closing date. You can request to review the documents before signing, so plan and make an appointment with your closing and loan officers.
- Before closing, you will need to know how much cash you will need to close.
- Either attend closing in person or arrange for all documents to be couriered to you for signing before a pre-approved professional and then couriered back to the closing company.
Some things happen simultaneously, while others have a specific order in which they follow. The actual time everything takes to close will vary every time. Planning and communication can help streamline the time to close, and it is dependant on planning and cooperation.
What Can Cause Delays In Closing?
Mistakes and poor planning, and poor communication are the leading causes of most delays. Some delays can be caused by a title search, for example, discovering a problem no one previously knew about. Below are some of the most common delays in closing :
- Delay in applying for a mortgage. Not getting a pre-approval letter before submitting an offer.
- A buyer going out and increasing their debt (e.g., buying furniture for their new home with credit) resulting in action required to fix the debt-to-income problem.
- A low appraisal may need the contract price to be renegotiated. Until a new contract exists, all work stops.
- Failing to arrange homeowner or required hazard insurance in time, or where the insurance broker fails to provide the necessary proof of coverage.
- The title agent discovered an issue with the title, and the property's title needs to be corrected before the new title insurance can be issued.
Most delays result from poor planning and poor cooperation. Choosing a professional with an excellent reputation and track record is key to avoiding delays. Realtors, loan officers, title agents with experience are more likely to know each other and how each entity works together to have a seamless transaction.
Call us today at 406.220.0077 to learn more about how you can get pre-approved. Or click the apply button now to begin your journey into homeownership.