This section will give you a good Idea of the mortgage process and the time frame involved. The knowledge will help you feel more comfortable as you go through the steps and it will also help you spot any red flags along the way if they should appear.The type of loan you are applying for will determine the length of time required to approve and close your loan. Different loan types require different documentation.

As an example, If you have good credit and lots of equity in your home and you are applying for a 2nd mortgage the lender may not require an appraisal. If you are getting a Line of credit on your equity, that documentation can be completed with some lenders in a matter of weeks. If you qualify for automated processing (DU or LP) it is sometimes possible to close in less than 60 days, sometimes even in as little as 30 days.

Your loan originator should walk you through the process up front so you will know what to expect. Typically, most loans take 4 to 10 weeks to close.

Apply for a loan
The mortgage application process is where you fill out the application, sign various forms that authorize the us to process your loan, and deliver your documentation requirements, such as bank statements, pay stubs, W2s, etc.  Generally this is all done electronically.  You should understand that the next process cannot begin until these documents are completed and or received, so it is imperative that you get your documentation in within 2 days of your lock date.

Mortgage Processing

When all of your documentation is received it then goes to a processor who verifies and validates all of the information to be true and correct. Verification requests may be sent to your employers, mortgage holder/landlord and lending institutions. This is done electronically when possible. It is usually during this time frame that the appraisal and the title policy are ordered.

When all the information is collected the processor then verifies that basic lender loan requirements have been met. The file is then packaged in a manner the lender specifies. The completed package (including the appraisal and title report) is then sent to the underwriting department to a lender-specified location.

The processing of your loan usually takes about one to two weeks but it can often be delayed when third parties do not respond to the validation requests or appraisals are delayed. If your loan qualifies for DU (Desktop Underwriting) or LP (Loan Prospector), these are computer automated systems, the documentation requirements are often cut in half and the process can be completed in three to five days depending on the volume of loans the processor has.

Respond in a Timely Manner to Document and Condition Requests

You will be assigned a processor who will work very closely with you to get your loan closed on time.  When a request is made of you, it is important to respond quickly, and to provide the requested information and / or documents right away.  This also includes needed responses to conditions the lender may ask about.  Failure to respond in a timely and accurate manner can impact your closing date and result in rate extension fees.  All document requests need to be completed and submitted by you to your processor no later than 48 hours after notification.

Mortgage Underwriting

The underwriter reviews your loan package to make sure it conforms to all the guidelines required for that loan product. They also review the appraisal and title report and may do additional validation of employment, mortgage payments, and credit, and anything else they feel is necessary to document your loan. They have ultimate power and decision authority over the approval of your loan. The time required to do this is driven by the volume in the market.  under heavy market volume, it take up to two weeks but under normal conditions it only takes three to five days.

Most lenders today use Automated Underwriting. The advantage is less documentation and it speeds up the process. The computer actually makes the approval decision and the underwriter only reviews the supporting documentation and the appraisal. However, if any documentation is missing, inaccurate, or does not agree with the 1003 loan application, the loan will be kicked out of this system until documentation requirements are met or the loan is turned down or resubmitted.

Conditions To Close

When the underwriter is done reviewing your loan they will send "conditions to close" to your processor. These are normally just requirements for further documentation to support your file. When these needs have been satisfied the underwriter will give a final approval and clear to close.

Clear To Close

When the processor gets the clear to close they then schedule and coordinate with all the parties the time and location to sign the final documents to close the loan. This normally only takes an hour to schedule.

Draw Documents

When everything is scheduled the lender then draws the document package and sends it to the closing company. This can be done by overnight delivery, fax, or electronically. It can take one to two days. You meet, sign the papers, and pick up the keys.

What happens at a mortgage closing?

Closing is the last step in the home-buying process. It's where all the parties get together to finalize the transaction by exchanging signatures, checks and ultimately, house keys.