Everyone’s thinking it – why on earth does the mortgage process take so long? With the typical time of application to closing averaging 45-60 days, we understand why people are so curious.
The shortest answer we can give you is that it takes so long because it’s the biggest purchase you’ll ever make and there are many necessary checks and balances that go into ensuring it is a sensible purchase.
If that answer doesn’t quite satisfy your curiosity, we’ll explain more in depth below.
There are a lot of people and even more paperwork that go into getting a mortgage. We’re sure we don’t have to tell you there’s a lot of paperwork – you know that already. But from start to finish, over seven different individuals need to work together. Below are the most prominent players in the mortgage process and a brief description of the role they play.
- Loan officer (that’s us!) – A loan officer’s primary roles are to determine what mortgages you qualify for, present multiple financing options, help to complete the loan application, and keep tabs on your loan as it moves through the approval process.
- Real estate professional – A real estate professional helps you to find a home by narrowing the search options, accompanies you to showings, handles negotiations with the seller, and generally looks out for your best interests.
- Loan processor – The loan processor prepares your mortgage loan information and application for the underwriter to review. This includes making sure all of the documents are accounted for and double-checking for errors.
- Mortgage underwriter – An underwriter assesses whether or not you are eligible for the loan and will accept or reject your loan based on the information provided.
- Real estate appraiser – Appraisers look at the property you are purchasing and determine its worth.
- Home inspector – A home inspector will go through the home you are purchasing to uncover any defects.
- Closing representative – The closing representative oversees and coordinates the closing, records closing documents, and disburses money to the appropriate parties.
In 2014, a number of regulations were passed to help protect consumers. As a result, more verification is needed throughout the process which takes additional time to complete. For example, the ability-to-repay rule requires the lender to thoroughly verify and document a borrower’s ability to repay the loan. This requires the lender to delve deeper into your finances than previously required.
The reasons listed above account for a lot of time in the mortgage process. There are, however, additional delays that can occur.
- Lenders can get busy during peak home buying seasons or when interest rates are low.
- Underwriters often request additional documents to determine the borrower’s eligibility.
- Discovering the home appraisal is different than what was listed on the purchase agreement.
- The money in your account for closing needs to be verified beforehand or else a delay may occur to verify it.
- Opening new debt, having someone review your credit score, or other items that could affect your credit score can delay the process.
We know this is a lot of information to take in at once but, believe it or not, we’re just scratching the surface of the mortgage process here. We’re happy to answer any questions you may have, so feel free to shoot us an email or give us a call at (402) 991-5153. We look forward to hearing from you!