How Long Will it take to close on a home and What to Expect

13th Jul 2020 Uncategorized

Closing on a loan usually takes 6 – 7 weeks in which you can expect to pay up to 5% of the purchase price in closing costs.

All your hard work and the stress of buying a home will pay off when you get your keys in your hand on the day of your closing. There is a lot that still happens in between though. Here are some tips to help minimize the stress of closing on your home.

One question most people have is, How long does it take to close on our house?

If you have cash, you can close within a couple of weeks, but if not the timeline is more like 6-7 weeks if you’re financing your home with a loan.

Buyer’s obligations: Your first steps are to choose a title company, Like with our sister company, Search My Title, apply for your mortgage loan, order your home inspection, which we highly recommend even though it is an optional solution, and purchase homeowners insurance.
Title search: The title search ensures there are no liens are on the house and checks for other title issues that may be underlying. At the end of this process, the title company issues you title insurance, which protects the your investment and guarantees the title is clear.
Loan processing: The lender starts processing your loan application as soon as you submit it with a copy of your signed agreement. The lender will ask for an appraisal to verify the value of the property and check your credit history,your income, and your debt to ensure that you qualify for the loan. This part of the process is called the underwriting.

Here you will be asked to submit your tax returns,your bank statements, your income verification, and, other documents to get the process started.

Step	Typical time it takes
Initial negotiation	Varies, but allow 48-72 hours
Open escrow	Shortly after offer is accepted
Clear title	About 2 weeks
Home inspection	Within several days of signing contract
Repairs	Depends on the severity of the issues
Appraisal	Depends on the lender (report delivered about a week after appraisal is complete)
Loan processing	6 to 7 weeks
Final walk-through	1/2 hour to one Hour on or immediately before closing day
Closing	1 to 2 hours

What happens once you close on a house?

Closing on your house finalizes the loan and the transfer of ownership from the seller to you. This is when the funds are distributed and you get the keys to your new home.

What should you bring on the day of the closing?

What will closing cost you?

Expect to pay the remained of the down payment and pay up to 5% of the purchase price in closing costs.

Here are some examples of fees you might pay at closing and the typical cost of each:

Type of fee	Typical cost
Down payment	Up to 20% of loan
Appraisal fee	Around $300 to $500
Escrow deposits (for property tax and homeowners insurance)	Prorated for the portion of the year you’ll own the home, plus reserves unless they want the taxes upfront
Real estate transfer taxes and fees	different by location
Title insurance	Around $1,000, but also depends by state and home price
Loan origination fee	0.5% to 1.5% of loan amount
Prepaid loan interest	Amount that accrues between closing day and the date your first mortgage payment is due
Mortgage insurance (required with a down payment less than 20%)	Conventional: 0.5% to 1% of loan amount per year FHA: 1.75% of loan amount up-front
Loan discount points (optional)	Each point equals 1% of loan amount

What paperwork will need to be taken care of during Closing?

Who is there at the closing?

A sale of a house has many moving parts, so sometimes there might be a delay. Most delays are short and fairly easy to resolve. Here are some common ones:

Financing issues: Know that your mortgage pre-approval isn’t a loan guarantee. Missing documents or a change to your bank account or credit can raise concerns that might notify the lender to take a closer look before it approves your loan.
Title issues: After financing, title work has the biggest impact on how long to close on a house because you can’t close without a clear title.
Condition issues: Your final walk-through. Make sure the house is in the condition you want it.

Integrity First.