How Long Does It Take to Close on a Home?
Closing on a home can be an exciting time; it’s the final step in the home buying process where the property title officially passes from seller to buyer. But, how long does it take to close on a home?
In general, after filling out your mortgage loan, you can expect a home to be closed between 30 and 45 days. During the actual home closing day, completion of the final paperwork will take 1 to 2 hours if everything goes to plan.
Still, it’s important to get an idea of how long a home will close for you. Below, we are covering 4 factors that can either slow down or speed up your home closing process (+ a bonus tip at the end).
Factors to Consider When Closing on a Home
How You Finance the Home
Cash, credit, or loans? Cash-only transactions are the fastest way to close on a home. By paying in case, you can skip the loan application process which comes with its own background checks, paperwork, and processing times.
Since most people will need a mortgage to finance a home, we also need to consider the type of mortgage you get. There are 8 mortgage types, and the processing time for them ranges from 4 to 8 weeks. Some of the most common choices include conventional loans, FHA loans, and VA loans:
- Conventional loans: takes approximately 4 weeks to process
- FHA loans: takes approximately 6 weeks to process
- VA loans: takes more than 6 weeks to process
The Results of the Appraisal
Before loans can be approved, most lenders will issue an appraisal of the home in question. If the results of the appraisal come out being unfavorable (in most cases, coming back too low), you may request a second appraisal. This would extend the closing time.
Past Insurance Claims
Mortgage lenders want a home to be insured before granting you a loan. It makes sense since this reduces risk on their end. However, this safety mechanism can also increase the closing time for a home. If the previous homeowner made large insurance claims on the home, insurance companies may deem the home too risky to insure. For those relying on a mortgage, you’ll need to take extra steps to get over this hurdle.
Our Advice: Educate Yourself on the Home Closing Process
The surefire way to double or even triple home closing time is to miss a step (or steps) in the process. We recommend checking out Investopedia’s 12 Steps of a Real Estate Closing to learn more about the home closing process. It’s a quick read and makes the information digestible.