Monday, October 6, 2014

How Long Does the Loan Process Take?

How long does the home loan process take?

Complete An Application

A smooth process starts off with a strong start! It will be easier for your mortgage professional to estimate a closing date once you fully complete an application. This is more than just submitting a Form 1003 – you need to also submit income verification (usually two recent pay stubs and the past 2 years’ W-2 or 1099s) along with any additional documentation that you lender may require for your specific situation. Bank statements, proof of down payment funds, purchase agreements and necessary letters of explanation (LOE) may be required to formally complete your application.

Conventional Mortgages

A loan that is not provided by or insured by the U.S. government is a conventional mortgage. These type of loans generally take 3-4 weeks for a refinance or up to 6 weeks for a purchase. However, keep in mind that if you have unique circumstances or a complex situation, this timeframe may be extended. Make sure you stay in close contact with your mortgage professional during the entire process to keep everything running on schedule.

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FHA Mortgages

A loan via FHA (Federal Housing Administration) often takes longer than a conventional mortgage. While FHA has streamlined their processing over the years, it’s a good idea to estimate that extra time might be required. Keep in mind that FHA does not offer loans – only insures the amount that your lender approves.

VA Mortgages

Like FHA – the VA (Veterans Administration) does not directly loan on mortgages – just insures the amount with your lender. While this was once very time consuming, a VA mortgage not closes in 6-7 weeks. Keep in mind that along with the standard income verification documents, you will also have to submit a Certificate of Eligibility (from the Veterans Administration) to qualify for this program. 

Your Role in the Process

While you cannot control the processing of your loan – you do play a direct role in the transaction. Many loan officers deal with delays due to the borrowers actions. When a lender asks you for specific or additional documentation – it’s important that you respond as soon as possible. Your lender wants to close your loan quickly but incomplete applications are useless to them. Not only can you send your file to the bottom of the “to-do” list but you could jeopardize your entire deal if you fail to respond to requests in a timely manner.

Key Take Away

Everyone involved in your loan transaction wants to reach the closing date quickly. Make sure you put on your ‘patience’ hat and step up when your lender requests something from you. This kind of attitude will work to your benefit and get you to that closing date quickly and painlessly!

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Midwest Equity Mortgage, LLC

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All information provided in this publication is for informational and educational purposes only, and in no way, is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Midwest Equity Mortgage, LLC does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Midwest Equity Mortgage, LLC do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.

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