Lenders close mortgages faster, data shows
When it comes to finalizing home loans, lenders move faster.
Many homebuyers are surprised to learn that taking out a mortgage can be a long process. The reason? There are many steps to finalizing a home loan, and each step is important.
First of all, a lender should review the information it receives from an applicant. This typically includes tax returns, bank statements, pay stubs, and other documents that paint a complete picture of an applicant’s finances. All this information is then verified by a subscriber.
After that, the purchased home should be appraised to make sure it is worth enough money to justify the amount borrowed to finance it. Finally, a title search should be done to make sure that there are no legal issues with the sale itself.
In total, it’s not unusual for a mortgage to take 60 days to close. But these days mortgage lenders are doing a little better.
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Mortgage closings accelerate
In April, the average time to close a mortgage declined for the fourth consecutive month to 51 days, according to ICE Mortgage Technology. And that’s actually a good thing for buyers for several reasons.
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First, when buyers are approved for a mortgage, they are usually able to lock in the interest rate presented to them for a limited time. This period could be 30, 45 or 60 days – or more. But in general, extending an initial rate freeze costs money, and if the closing of a mortgage is delayed, it is an expense that a borrower might have to bear. But now that lenders are getting faster at closing mortgages, having to pay for rate foreclosure extensions is becoming less of a problem.
Second, faster closings allow borrowers to move into their homes faster. And it might work to their advantage, especially for those hoping to complete a move within a certain time frame. For example, an applicant may apply for a mortgage loan in late June with the hope of moving into a new home by the end of August, before the start of the school year, but a delayed closure could prevent this from happening. produce.
How to help your mortgage close faster
If you are in the process of getting a mortgage, you may be anxious to finalize that loan and own your new home. While some delays from your lender may be out of your control, one thing can made to get things done is available to your lender and respond quickly if your lender requests more financial information or documentation. The sooner you give your lender the details they need, the sooner your loan can be processed.
In most cases, however, how quickly your mortgage closes really depends on how quickly your lender is working and how overloaded the business is. During times of high mortgage demand, lenders can be late and closings can take longer. Considering the state of the current real estate market, an average mortgage closing time of 51 days really isn’t bad at all.
