Provided all your documents are available and there are no appraised value issues – closing should still be within 30 days. Unforeseen varibles could push out to 45 tops. Most underwrting (UW) turn times are 5 days once investor recieves full file. If the file is not clean or the UW add condtions you can add another week. Conditions could be something that the loan processor did not include in the file and should have (bank statement, picture ID, correct title clause, insurance binder, etc.), the investor has a question on appraised value and has to do a formal review (happens a lot), or the investor just made up some new guideline (12 month VOR/VOM on streamlines – which also happens a lot).
Originating, processing, closing, and funding mortgages is like driving nails with a rubber spoon – your best bet is to chose your loan originator based upon thier experience within today’s current market to ensure a smooth transaction.
There is no direct answer to this question, as times for closing a loan will vary greatly depending on a number of factors. In a time when there is not much mortgage application volume, and in a normal market loans can close in as little as 5-7 days, and a typical transaction would take 2 to 3 weeks. On the other hand in times when mortgage application volume is high, or when the market is very risk averse it can take 60-90 days, or longer to close the same mortgage loan. Some factors that influence turn times on mortgage loans are as follows:
1.) Application Volume If there are a large number of people interested in mortgage loans, and therefore applying for mortgage loans, it can greatly slow down the process. This is because a mortgage application requires a number of man-hours to complete and close. If you have a certain number of employees able to process and close loans, and the number of applications in process double or triple you can see how it could slow down the process greatly.
2.) Application Specific Information/Credit Quality In addition to standard industry-wide factors like application volume, the time to process and close a mortgage loan can vary depending on factors in each specific loan. For example, a loan that includes little documentation, or lower credit quality can require special attention to document a loan decision. This would take additional time to process and close. Additionally something such as a 2nd mortgage loan subordination can take time, as attempting to subordinate a second mortgage leaves you subject to the turn times of another bank to process the subordination paperwork.
3.) Market Risk/Risk Aversion One more area that would have an effect on time required to close a mortgage loan has to do with the general market feeling towards mortgage lending. For example, in the early to mid 2000’s, when risk for mortgage loans was deemed to be very low, loans moved through the underwriting process very easily. With little perceived risk in the market at that time loans were approved very quickly. On the flip side of the coin, in the current market (late 2007 to present) underwriting a mortgage loan has become a much more stringent process. Because mortgage loans are currently viewed as containing a higher risk that previously thought, they are now underwritten much more diligently. If you consider that each individual loan may take 1 to 3 hours to underwrite now, as opposed to less than an hour previously, you can see that over the course of many thousands of loans, the process because slowed exponentially.
There are certainly other factors that weigh into how long it takes to close a loan (how long does it take to complete an appraisal, the volume and capacity of the individual lender you are using, etc), but the above are 3 of the main factors. In the end it will depend on a combination of all of these to truly answer your question.