How Long Does It Take to Close On a House?

4. Home Appraisal

Your lender will order a home appraisal to get an independent opinion of the property’s value and determine if it supports the amount you’re borrowing. The appraiser will base their professional, unbiased opinion on the home’s condition, features, and comparable properties in the area.

If the home appraises below the purchase price, your lender may lower how much you can borrow. For example, if the original purchase price was $360,000, but the home appraises for $345,000, the lender may only allow you to borrow the appraised value.

If the contract includes an appraisal contingency, you may be able to renegotiate with the seller or back out of the deal. If not, you may need to bring more cash to closing to cover the difference. Keep in mind that this may also delay your closing.

5. Title Search and Underwriting

The next step is the underwriting process, where an underwriter reviews your finances and loan documentation to determine whether or not to approve the home loan. The title search will also occur at the same time.

A title company or other professional will do title searches to verify property ownership and look for liens, competing ownership claims, or other issues. For instance, taxing authorities may have placed a lien on the property if the homeowner hasn’t paid property taxes. Since liens are attached to property, not people, it would become your responsibility if you purchase the home without doing a title search.

If the title search uncovers problems, the title company may work with you and all other parties involved to help resolve it before closing. Depending on the problem, this could delay the closing date.

6. Finalize and Clear-to-Close

Once underwriting requirements have been satisfied, you’re clear to close. This means your mortgage lender approved your loan application and has given the green light to schedule the official closing. While you’re close to crossing the finish line, there are still a few things you should do before you get to the closing table.

Review your final loan and closing information, including your loan terms and closing costs. You’ll also receive a Closing Disclosure at least three business days before closing, which outlines details about your mortgage, including the interest rate, loan terms, monthly payment, and closing costs. This also gives you time to ask your lender questions before signing your final documents.

7. Closing and Funding

At closing, you’ll review and sign documents and pay closing costs and other amounts due. Your lender will distribute the funds, and closing agents and other parties involved in the transaction will handle paperwork and funds.

Once everything is completed, signed, and recorded, ownership of the home transfers to you. However, the exact process varies by state and transaction. You can still choose not to sign if you’re uncomfortable, but walking away at this stage may mean losing your earnest money deposit and other fees.

What Can Delay a House Closing?

The closing process may be delayed for a variety of reasons. Below are some of the most common.

• Financing or mortgage approval issues: Any changes to your income, employment, debt, or credit before closing could affect your mortgage approval. If this happens, your lender may require additional documentation before moving forward.
• Low home appraisal: You and the seller may need more time to decide whether to proceed if there’s a low home appraisal. Common options include negotiating a lower purchase price with the seller or covering the gap by bringing extra cash to closing.
• Problems discovered during the home inspection: Poor home inspection results may require negotiations or repairs, which could cause delays.
• Title issues: Liens, ownership disputes, or errors in public records may need to be addressed before ownership can transfer.
• Underwriting delays: An underwriter may request additional documents or clarification about your finances before giving their approval.
• Homeowners insurance issues: Lenders typically require homeowners insurance before approving the loan. Trouble acquiring coverage or providing proof of insurance could delay the loan.
• Final walkthrough problems: The final walkthrough gives you an opportunity to see the state of the home before you finalize the loan. You might find that agreed-upon repairs weren't completed or the home's condition has changed.
• Documentation or administrative errors: Missing documents, wrong information, or errors in the closing paperwork can cause delays while they’re corrected.

Tips for Avoiding Closing Delays

You can’t control every part of the closing process, but being prepared and responsive can help avoid preventable delays.

• Get preapproved before making an offer: Getting preapproved can help you understand how much house you can realistically afford and catch potential financing issues earlier in the process.
• Gather financial documents early: Have pay stubs, bank statements, W-2s, tax returns, and any other documents you may need ready to go. When your lender asks for documentation, you’re already prepared.
• Avoid major financial changes before closing: Avoid taking on new debt, opening or closing credit accounts, changing jobs, or making large purchases without first discussing the potential impact with your lender. Even small changes to your finances or credit could affect your loan approval.
• Schedule the inspection and appraisal promptly: Get your inspection and appraisal scheduled as early in the process as possible. This will give you more time to address issues, such as a low appraisal, needed repairs, or other problems that could affect closing.
• Respond quickly to lender and underwriter requests: Your lender may need more information or additional documents during the underwriting process. Having everything together and responding quickly can help prevent delays.
• Address title issues early: If the title search uncovers a lien or ownership claim, address it as soon as possible. Some title issues must be resolved before closing.
• Secure homeowners insurance on time: Most lenders require proof of homeowners insurance before closing. Waiting until the last minute to find coverage could slow things down.
• Review the Closing Disclosure carefully: Check loan terms, monthly payment, and closing costs when you receive your Closing Disclosure. This gives you time to ask questions or fix issues before closing.
• Stay in close communication with your lender, agent, and closing team: Answer phone calls, emails, and text messages from your lender and real estate agent as quickly as you can. This can help resolve questions or requests before they hold up the closing process.

How Long Does Closing Day Take?

Closing day typically takes one to a few hours, much less time than the overall mortgage closing process. During your appointment, you’ll review and sign your final loan and closing documents, pay any amounts due, and complete any other closing requirements.

Signing the paperwork doesn’t necessarily mean you’ll receive your keys right away. Depending on where you live and the transaction, the loan may still need to be funded and documents officially recorded before the sale is complete and you can take possession of your new home.

Final Thoughts: Your Closing Timeline

Closing on a home usually takes a few weeks and involves multiple steps, including financing, inspection, appraisal, title work, underwriting, and final documentation. The timeline can vary, but staying organized, staying ahead of deadlines, and responding quickly to requests can help you avoid unnecessary delays and keep your closing on track.

Ready to buy a home? Get prequalified today with Freedom Mortgage.