So you’re ready to buy a home. That’s exciting, but before you get ahead of yourself and start packing boxes, it’s a good idea to know what the average timeline is for someone to get into a new home. Part of the process includes time to get qualified for and close on the mortgage. Here’s an overview of that timeline so you can plan your next move.
The first step is to talk to a lender to get prequalified so you can start shopping for your home. This isn’t an in-depth review of your financial history, it’s just an overview where the lender will determine your viability to get a mortgage loan, and give you an estimate of what you can borrow. It’s not a guarantee that you can get that amount, so when you’re home shopping know that the actual amount you can get approved for may be different.
Timeline: Prequalification is a quick process that usually only takes a day or two. How long you shop for the perfect home is up to you.
Once you find a home, the next step is to go through a more in-depth review of your finances and creditworthiness for preapproval. You will find out the specific amount you can qualify for so you can put an offer down on the house. Many sellers won’t accept an offer unless you are already preapproved so they know it’s a serious and legitimate offer.
Timeline: Preapproval may take several days. Gather important documents like bank statements, paycheck stubs, IRS tax filings, and bank statements to speed it up.
Once you finalize the price of the home through negotiations, you and the seller will sign a purchase agreement, which is a binding contract.
Timeline: Negotiations on home prices could take a few weeks of going back and forth.
A final step is to schedule a home inspection (most lenders require this). If you’re not sure what to look for, there are checklists available to help you go through the home and identify red flags that could indicate a problem. Your lender will also schedule an appraisal to estimate the value of the home. You won’t be able to get a loan for more than the home’s appraised value.
Timeline: Home inspections and appraisals could take up to 5 or 6 weeks, depending on yours and the seller’s schedule, as well as the availability of appraisers.
The final step is to take your signed purchase agreement to the lender and they will approve you for the loan. The lender will schedule a date to “close”, which is when you and the sellers get together and sign all the official documents to transfer the home ownership.
Timeline: This can take about 2 to 4 weeks after the appraisal and inspection are done. Most lenders plan about 30-45 days from the time the offer is finalized until closing.
If you’re ready to get started on this process, talk to Integrity First Lending about getting your prequalification to start shopping for your future home.