How long does it take to close on a house?
It takes 49 days on average to close a home purchase loan, according to the most recent data from ICE Mortgage Technologies. But some borrowers can close much faster, in as few as 30 days or even less.
Closing times increased during the pandemic as record low mortgage rates drove up demand for new home loans and refinance loans. As rates return to historic norms, home buyers in 2022 could reach their closing day sooner. Plus, there are steps you can take to speed up your closing process. Here’s how.
In this article (Skip to…)
- Average closing times
- How fast can you close?
- Tips to close faster
- Steps to close on a house
- Today’s mortgage rates
Closing times by loan type
Closing times vary by each type of loan, according to ICE Mortgage Technologies’ December 2021 report (the most recent data available).*
Average closing times by loan type:
- Conventional loans: 48 days
- VA loans: 57 days
- FHA loans: 54 days
Refinance loans tend to close faster than home purchase loans. For example, a conventional refinance takes only 44 days on average according to ICE, whereas a conventional home purchase takes 52 days to close.
Unlike conventional loans, VA and FHA loans come with government-backed mortgage insurance, and both loan types also have their own specific home appraisal process. These extra steps can add a few business days to the closing timeline.
*ICE Mortgage Technology was formerly known as Ellie Mae
How fast can you close on a house?
It’s possible to close faster than the national average closing time of 49 days. In fact, some buyers close in 30 days or less, though you’d need to have a very straightforward mortgage application and no complications with the sale to do so.
“Forty-nine days may be the national overall average, but with a good broker, a solid documentation package, and persistence, some buyers can close in as fast as two weeks,” says Jon Meyer, licensed loan officer and The Mortgage Reports’ lending expert.
“With a good broker, a solid documentation package, and persistence, some buyers can close in as fast as two weeks.”–Jon Meyer, mortgage loan officer, Supreme Lending
Buyers who pay cash for their new home — instead of going through the mortgage application process — typically close faster. But even when paying cash, it often takes at least a couple of weeks to close. You’d still need a title search, a home inspection, a transfer of deed, and an escrow account. You may even choose to get a home appraisal so you’d know the home value.
Most buyers need mortgages to help buy their homes. A mortgage-financed home won’t close in two weeks or less, but there are ways to shave a few days — or even a week — off your real estate transaction.
Tricks for closing on time with a “quick closing” mortgage
Borrowers can speed up their closing dates by being more prepared for the home buying process.
For example, a prepared buyer has already made plans for the down payment — either by saving up the money or applying for down payment assistance programs.
Of all the moving pieces that affect your closing date, the mortgage loan itself can have the biggest impact.
Make sure you’re prepared for the loan process to ensure you close as quickly as possible. Know what documents you’ll need for a home loan and prepare them ahead of time. Always respond to your lender quickly. And work to resolve any conditions that might come with your initial approval.
Buyers who are already preapproved when they make an offer and who stay in close contact with their mortgage lender will have the best shot at closing fast on a house.
How to get your purchase loan approved quickly
The amount of time you’ll need to finalize your home sale depends, in part, on how quickly you respond to your loan officer’s requests for information.
You can speed up your response time by being prepared for your lender’s requests. You can ask ahead of time what’s needed, then gather the required documentation. Even scanning in documents before they’re requested can save time later.
There are other tricks for a quick closing, too, and most come back to being prepared.
1. Know your paperwork requirements
It’s no secret. Mortgage lenders like paperwork. When you’re buying a home, you’ll want to be prepared with the most commonly required verification documents.
Common paperwork includes W-2 statements and federal tax returns from the last two years, your two most recent pay stubs, and your last two bank statements.
You should also have a copy of your driver’s license handy, as well as the Social Security numbers of everyone whose name will be listed on the mortgage.
If you know you have a unique credit situation such as a recent short sale or foreclosure, child support or alimony payments, or gift funds from a relative, have the relevant, related documentation ready.
This “gathering paperwork” step can be the most time-consuming one in the mortgage process, and you know you’re going to need the documents. Consider scanning them somewhere and having them ready in advance. This can shave days off your approval time and help you reach your closing more quickly.
2. Always be honest with your lender
Be honest and open with your lender — even if you worry that you’ll harm your approval chances. There are two reasons for this.
The first reason is that withholding information from your mortgage application can constitute loan fraud, which is a far worse outcome than not getting your home loan approved.
The second reason is that your mortgage lender will typically uncover what you’re trying to hide anyway. This is because, as part of the mortgage approval process:
- A credit check is performed which lists your creditors, debts, and judgments, if any
- An occupancy test is conducted by an underwriter to determine whether you really live where you say you do
- An employment check is done to verify your job status and income
Public records are scoured, too, just in case the above checks fail to include information the lender would need as part of your approval.
Using all of this information, should a mortgage underwriter uncover inconsistencies between your home loan application and the supplemental data gathered, it will ask you to explain the discrepancy in detail and your loan may be denied as a result.
Just know that your lender will uncover whatever information you elect to withhold — and this can lead to delays if not denial — so share everything.
3. Use pre-approval to speed up closing time
Home buyers with a mortgage pre-approval in-hand when they make an offer will be signing final paperwork sooner. Often, a pre-approval can speed up closing by a week or more.
This is possible because of the role which a pre-approval plays to a lender. Mortgage pre-approvals are dry runs: approvals based on an expected set of loan criteria which will eventually go to closing.
During the pre-approval process, your loan officer will take a complete loan application which includes performing an income and asset verification.
The LO will account for specific loan traits which may affect your final approval such as your personal credit scores, any required child support payments, or the availability of a co-signer.
In fact, when a pre-approval is issued, about the only missing item is often the physical property address of the home being purchased.
To compensate for this lack of “real address,” lenders use dummy information based on probable loan data including sample purchase prices, sample real estate tax bills common for the area, and sample homeowners insurance policies and/or homeowners association assessments, where applicable.
When a loan is pre-approved, a buyer can move immediately from writing the contract to underwriting the loan.
Why does closing on a house take so long?
A lot happens between signing a contract to buy a home and closing on the home.
- Your mortgage underwriting process begins
- The lender orders a home appraisal
- You hire a home inspector
- A title company researches the ownership history of the home
- Money starts to flow in both directions, in an escrow account, to pay for these services
Each of these steps requires anywhere from a few days to a few weeks. While some of the steps can happen simultaneously, others are interrelated. Even a small snag could delay closing by days or weeks.
Here’s a more detailed look at what goes on during the closing process.
Opening an escrow account
Your closing agent or real estate attorney will open an escrow account to hold and pay out money, as needed, for closing services. This keeps transactions organized and on-time.
For example, you can pay your earnest money by depositing it into escrow, and when the home closes it will be credited toward your down payment.
Getting a home inspection
Once you’re under contract, you can hire and schedule your home inspection. Your own inspection isn’t required, but it’s a good way to protect yourself. An inspector can find problems in a home that you might not see.
When you make your purchase contract contingent upon a satisfactory home inspection, you can exit the contract — and get your earnest money back — if the inspector finds serious problems with the home.
Or, the inspector’s report might inspire you to negotiate for a lower sale price so you can spend some of your home buying budget on repairs.
Performing title work
During the closing process, a real estate attorney or closing agent will hire a title company to begin a title search. This process ensures the seller is the sole owner and has the right to sell the home to you.
If title issues arise — such as a lien or a claim of inheritance — the seller will need to resolve them before closing. You’ll have a chance to buy title insurance which would protect you if a title issue arises after you’ve closed.
Finalizing the mortgage loan
Mortgage pre-approval gives borrowers a head start on their home loans. But the actual underwriting process begins only after you’ve entered into the purchase agreement.
Before issuing a loan approval, underwriters will check and double-check details about your income, debts, and credit report. They’ll also check out your soon-to-be new home, with help from a home appraiser.
During this process, you can lock in your interest rate. Then you’ll get a Closing Disclosure which will show your loan costs, including mortgage payment amounts and the total amount of interest you’d pay over the life of the loan.
Making the down payment
If you’re like most buyers, your mortgage loan amount will cover the majority of your home’s purchase price.
But you’ll still need to make a down payment to cover the remainder of the balance — unless you’re eligible for USDA or VA loans which require no money down.
You can transfer your down payment into escrow via cashier’s check or an electronic transfer.
Paying the closing costs
Closing on a home requires various services that each have a cost. Title fees, attorney’s fees, lender’s fees, home appraisal fees — they’re all part of your home’s closing costs.
These costs add up to between 2% and 5% of the home’s purchase price for most buyers. That’s anywhere from $6,600 to $16,500 for a $330,000 home.
Sometimes, the seller can help pay these costs; you’d need to negotiate that into your purchase contract. It’s also possible to have the lender cover some of your fees in exchange for a higher interest rate. Your contribution to closing costs must go into escrow in order to close.
The final walk-through
Usually, on closing day or the day before, you’ll do a final walk-through to make sure all is well with the new home. If you asked for repairs, now is the time to make sure they’ve been completed. If everything checks out, it’s time to make the home officially yours.
Signing the closing documents
The entire closing process culminates with the signing of your loan documents on closing day. First-time buyers are often overwhelmed by this huge stack of papers to sign. The final paperwork transfers ownership and places your mortgage lender’s lien on the property.
You’ll sign a promissory note promising to pay off the loan as agreed and a deed of trust which means the lender could foreclose if you failed to make loan payments. Depending on the type of loan, you may have some extra forms to sign.
What are today’s mortgage rates?
Mortgage rates have returned to historic norms after setting record lows during the pandemic. Rates could climb higher as the Fed works to cool inflation.
Like the average time to close, reported mortgage rates are only averages. Some buyers get lower-than-average rates based on their personal finances.
To see what kind of rates you qualify for, apply for a mortgage pre-approval and read the loan estimate carefully. It just so happens the pre-approval can also speed up your closing time so you’ll be a homeowner sooner.