According to ICE Mortgage Technology, the average timeline for closing on a house is 50 days. After the closing process, it can take less than two months to become a new homeowner. However, closing on a home is separate from closing on a loan, which can take an average of 47 days. Closing on a loan means your loan is finalized, and the funds can be distributed, often coinciding with closing on a home.
Timeline for Closing on a Home
Updated: November 1, 2024
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Fast Facts of Average Time to Close on a Home
Understanding how long it takes to close on a house can help you plan for the purchase of a home.
It takes an average of 50 days to close on a home purchase.
Closing a loan happens within 47 days, on average.
If you’re on a time crunch, conventional loans are often more quickly approved than other loans — but not by much.
Several aspects of purchasing a home can prolong the closing process, including appraisals and conditional approvals, which can take up to two weeks.
Sources:
Average Time to Close on a Home by Loan Type
The average timeline for closing on a house can differ based on the type of loan you get. Some loan types you can opt for include a Federal Housing Administration (FHA) loan, conventional loan or Veterans Affairs (VA) loan.
Across FHA, conventional and VA loans, it takes borrowers an average of 47 days to close on a loan. However, this timeframe has varied over the past few years. In May 2020, it took an average of 45 days to close on a loan, steadily increasing to a peak of 58 days in December 2020 before returning to 47 days in September 2021.
Federal Housing Administration (FHA) Loan
An FHA loan, issued by the Federal Housing Administration (FHA), is a mortgage insured by the FHA, which is part of the Department of Housing and Urban Development. Generally, FHA loans originate from private lenders but are insured by the FHA, which often leads to more favorable rates as there is less risk on the lender’s part.
As of September 2021, FHA loans take about 52 days to close. However, between May 2020 and September 2021, 62 days peaked in December 2020, and the lowest was 46 days in July 2020.
Conventional Loan
Conventional loans are mortgages from private lenders, such as banks or credit unions. It’s the most common financing option for first-time homebuyers, where rates, terms and requirements vary based on the lender — affecting the closing timeframe.
The average timeline for closing on a house with a conventional loan stands at 46 days, which is the most recent data from September 2021. The average has risen and fallen tremendously between May 2020 and September 2021, reaching a high of 57 days in December 2020 and a low of 45 days in August 2021.
Veterans Affairs (VA) Loan
A Veterans Affairs (VA) home loan is a mortgage meant solely for military members, veterans and surviving eligible spouses. Like FHA loans, a VA loan is issued by private lenders but insured by the U.S. Department of Veterans Affairs. They have less stringent requirements, as they only serve a specific population.
VA loans take roughly 53 days to close, the longest amongst FHA and conventional loans. The average has steadily increased since May 2020, starting at 49 days. In January 2021, however, the average time to close on a VA loan was at an all-time high of 66 days — just over two months.
Timeline of Closing on a Home
The timeline of closing on a home depends on each step of the process, including application and waiting for the release of the funds. If you’re interested in a home and others are interested in buying the same home, and making a higher offer, be prepared for a “bidding war,” which can also prolong closing. If applicable to you, this can take place before or after your application for a mortgage, as a pre-approval letter is not required to make an offer.
Understanding the process and having a gist of the timeline can help you plan for the home of your dreams.
Process | Estimated Completion Time | Description |
|---|---|---|
Application | 1 day | Begin by applying for a mortgage |
Disclosure | 1 to 3 days | This step is completed by the |
Documentation | Less than 1 week | Submit documents requested by |
Home Inspection | 5 days to 2 weeks | It’s important to hire an inspector to |
Appraisal | 1 to 2 weeks | An appraiser will determine the |
Underwriting | 1 to 3 days | The underwriting process is where |
Conditional Approval | 1 to 2 weeks | The lender may ask for additional |
Cleared to Close | 3 days | After receiving the offer, you must |
Release of Funds | 1 to 3 days | This is the final step, where your |
ESTIMATED TIMES MAY STILL VARY
While MoneyGeek has provided a rough timeline of the closing process, the actual time it takes to complete each step will depend on several factors, such as the property, your credit, the lender, and even how long your loan term will be. To get a good idea of what you might need in terms of financing, use MoneyGeek’s mortgage calculator to determine a rough estimate of your payments over time.
Average Time to Close on a Home FAQ
Purchasing and closing on a home is an exciting endeavor. Knowing the timeline for closing on a home is crucial to help you plan and feel secure in your decision. Learn more with MoneyGeek’s answers to some of the most frequently asked questions about closing on a home.
What does it mean to close on a home loan?
Closing on a home loan is the final stage in buying and financing a home. It’s where you sign the critical documents for your mortgage along with the lender.
How long does it take to close on a home?
It takes an average of 50 days to close on a home. However, the actual time it might take for you will depend on your circumstances, such as any complications with the property, your financial situation and more.
What are the steps for closing on a home?
There are eight steps to closing on a home:
- Application
- Disclosure
- Documentation
- Appraisal
- Underwriting
- Conditional approval
- Clearance to close
- The release of funds
How long after closing is your first mortgage payment due?
Once you've lived in your new home for at least 30 days, you'll need to settle your first mortgage payment, paid on the first of the month. For instance, if you closed on November 28, your first payment would be due on January 1.
How can you speed up the loan approval process?
Preparing your documents can help speed up your loan approval process. Remaining careful with your finances can also speed up the process, as opening a new line of credit in the middle of closing on a loan can affect your credit score, which can raise flags for lenders in the midst of processing your application.
Ask the experts:
How can buyers speed up the home purchase process?
Founder & CEO, Windy City HomeBuyer
To speed up closing on your home, get pre-approved for a mortgage before you even look at the first house. Once again, you have to be on top of the paperwork. The title company will be requesting a lot of documentation in addition to the lender. Thankfully, today, this is all digitized. Next, get the appraisal and inspection done as quickly as possible. If an appraiser says two weeks from now, find another one.
Even after the inspection and appraisal, the persons who performed them will take some time to get their paperwork together and sent to everyone involved. As soon as that happens, if there is anything that has to be repaired, get that information to the seller and let them know you need it done quickly. Sign the closing disclosure immediately to make certain that it is not holding up the closing date. Stay in close contact with everyone to make sure that nothing is forgotten. Last, use ACH transfers for escrow, earnest money and closing costs. Even if you deliver checks to people yourself, they take time to clear. Use ACH.
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About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
sources
- ICE Mortgage Technology. "September 2021 Origination Insight Report." Accessed October 28, 2024.