So, you’ve found the home of your dreams and are ready to apply for a mortgage? Once you and the seller have agreed on a price, you’ll need to seek a mortgage loan from a bank or other financial institution. While this may sound simple enough, there’s a hefty amount of legwork involved in the mortgage process, but thankfully you can speed up it by following a few basic steps.
Average Length of Mortgage Process
You might be surprised to learn that the average time for getting a mortgage approved is now 45 days, according to the mortgage software company Ellie Mae. This number is up from 41 days last year. Ellie Mae goes on to say that loans which close within 45 days typically yield lower interest rates than loans which close at 46 days, so buyers should aim to expedite the process when possible.
Get Pre-Approved Before You Shop for a Home
Arguably, the single easiest and most effective way to speed up the mortgage process is to get pre-approved for a loan before you start shopping for a home. Most buyers wait until they’ve found a home to seek a mortgage, at which point they must wait for the bank to facilitate the process. A better approach, however, is to seek a mortgage before you go searching for a home. In addition to speeding up the mortgage process, this will also give you a better idea of just how much you can afford.
Prepare Your Financial Documents
I know this probably sounds like common sense, but it’s still worth mentioning that you should prepare your financial documents in advance to help speed up the mortgage process. Mike Lyon, vice president of mortgages at Quicken Loans, says buyers generally need pay stubs covering a minimum of one month, as well as a recent monthly bank statement, a homeowner’s insurance statement, and a divorce decree (if applicable). Go ahead and prepare this information before the mortgage company asks for it.
Contact the Appraiser
According to an article published by Fox Business, appraisals eat up a significant portion of the mortgage process. It’s not uncommon for appraisals to take weeks, during which you are forced to wait. Nonetheless, it’s still a requirement when obtaining a mortgage. Make sure you are available to the appraiser, giving him or her your phone number and any other pertinent contact information when requested.